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2023 (10) TMI 811 - AT - Service TaxRecovery of short paid service tax - whether the allegation contained in the show cause notice that there was a shortfall in payment of service tax is correct or not? - HELD THAT - The show cause notice accepted the statement made in the calculation sheet regarding the figures and the only dispute was as to whether the amount of 13,93,06,059/- was in JPY or Rupees. The Commissioner does not doubt that this amount was in JPY and indeed he could not have in view of categorical statement in the calculation sheet that the amount was in JPY. The Commissioner however, went on to record findings on issues which were not even the subject matter of the show cause notice. The appellant was not required to explain as to how the said figures were in JPY, nor was the conversion rate in dispute. In view of the categorical reply submitted by the appellant and from a perusal of the calculation sheet and the submission advanced by the learned Counsel for the appellant, it cannot be doubted that the amount was in JPY which was converted into Indian Rupees. There would, therefore be no shortfall. The finding to the contrary recorded by the Commissioner, therefore, be sustained. Though detailed submissions have been advanced by learned counsel for the appellant for contending that service tax was not leviable and by the learned authorized representative appearing for the department that service tax would be leviable, it will not be appropriate to examine this issue in the first instance. This issue should be first examined by the Adjudicating Authority. As the records indicate, the appellant had not contested this matter. It would, therefore, be appropriate to provide an opportunity to the appellant to submit submissions regarding this issue to the adjudicating authority and the department should also be provided an opportunity to respond to the same. It is after the examination of the submissions made by the appellant and the department that the Adjudicating Authority should take a considered decision on this aspect. The matter is remitted to the Principal Commissioner to decide the issue relating to leviability of service tax on the amount received towards tickets booked from abroad for journey starting from India with effect from 01.05.2006 by Japan Airlines as expeditiously as possible - Appeal allowed by way of remand.
Issues Involved:
1. Alleged shortfall in payment of service tax. 2. Leviability of service tax on tickets booked outside India. Summary: Issue 1: Alleged Shortfall in Payment of Service Tax The appellant, a project office of Japan Airlines in India, was issued a show cause notice alleging shortfall in service tax payment. The department claimed the service tax amount indicated in the calculation sheet was Rs. 13,93,06,059/- but only Rs. 7.48 crores was deposited, demanding the balance amount. The appellant contended that the figures were in Japanese Yen (JPY), not Indian Rupees (INR), and provided a conversion calculation showing the correct amount in INR as Rs. 11,19,02,540/-. The Commissioner failed to consider this explanation and erroneously upheld the demand. The Tribunal found that the amount was indeed in JPY and converted correctly to INR, thus there was no shortfall in payment. Therefore, the demand based on the alleged shortfall was set aside. Issue 2: Leviability of Service Tax on Tickets Booked Outside India The appellant did not initially contest the leviability of service tax on tickets booked outside India. However, during the appeal, it was argued that no service tax was payable on such transactions. The Tribunal noted that this issue was not raised before the issuance of the show cause notice or during the initial proceedings. The matter was remitted to the Principal Commissioner to examine the leviability of service tax on the amount received for tickets booked abroad for journeys starting from India, providing an opportunity for both the appellant and the department to present their submissions. Conclusion: The Tribunal allowed the appeal to the extent of setting aside the demand based on the alleged shortfall in service tax payment and remitted the issue of leviability of service tax on tickets booked outside India back to the Principal Commissioner for reconsideration.
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