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2014 (1) TMI 1146 - AT - Service TaxTerritorial jurisdiction of Commissioner - Imposition of equivalent penalty - Held that:- services were rendered by the appellant from their various branch offices/locations other than Kolkata, pursuant to the contracts entered by the said offices with the clients, and also corresponding invoices were raised and payments received from the clients at the respective locations. However, Service Tax Registration was not obtained at the said locations - Commissioner would not assume jurisdiction only when they exercise option for centralized Registration, on account of either having centralized billing system or centralized accounting system, in adjudicating the allegation of non-payment of Service Tax on the gross taxable value of the services received and recorded in their consolidated Profit & Loss account, prepared at the Head Office at Kolkata. As per Section 66 of the Finance Act, 1994 Service Tax is chargeable on the value of taxable service received by the assessee and the appellant’s registered office being at Kolkata and their profit and loss account and balance sheet had been accordingly, prepared at the Kolkata office, on the inputs received in the form of Trial balances from the respective branch offices, as per the provisions of Companies Act, hence, there cannot be any doubt that there has been a centralized accounting system at Kolkata - Commissioner has jurisdiction to decide the issue of non-payment of Service Tax on the taxable value received by the Appellant for the services rendered through various branch offices and the value of such services duly accounted for, finally in their consolidated Balance Sheet and Profit & Loss account, prepared at Kolkata - Decided against assessee. Classification of service - Services rendered to various Electricity Boards, Cement companies - Whether such services would fall under the category of Clearing and forwarding agent - Held that:- Commissioner in the impugned order had recorded a finding that the amount received on account of freight financing were part of clearing and forwarding services rendered by the Appellant connected with clearing and forwarding operation of coal. He has also observed that the value for Service Tax did not include the actual railway freight charged by the Appellant, but on the amount of commission received from such services, hence, its value cannot be excluded from the total demand. On going through the said contract, we find that the services mentioned therein were not of simply making payment for the freight charges, in advance to railways, on behalf of their client, but it also includes services connected with clearing and forwarding operations, rendered to GSEB, hence, in our view the same are chargeable to Service Tax. Bar of limitation - Suppression of facts - Intention to evade tax - Held that:- mere inaction is not sufficient, but some positive action, with intent to evade payment of tax, should be present for invoking extended period of limitation - it is not for the Appellant to show their bona fide in not discharging the Service Tax during the said period. On the contrary, when extended period is invoked, alleging wilful misstatement, suppression of fact etc., the burden is on the Revenue to substantiate the same through material particulars - no specific evidence nor any reasoning in support of the conclusion of wilful suppression of facts with intent to evade payment of Service Tax has been recorded in the impugned Order by the ld. Commissioner. However, in the Show Cause Notice, analyzing the statement of one Shri Kalyan Banerjee, General Manager of the Appellant, it has been alleged that right steps were not taken by him to pay the Service Tax on the services rendered by the principals, which clearly indicates negligence on the part of Shri Banaerjee to comply with the law. We do not find merit in the said allegation of negligence in payment of Service Tax, could result in wilful misstatement or suppression of facts, thus, warranting invitation of extended period of limitation. we set aside the impugned Order and remit the case to the ld. Commissioner, Service Tax, Kolkata for recalculation of the demand, if any, applying the normal period of limitation prescribed under Section 73(1) of the Finance Act, 1994, as was in force at the material time. Also, while calculating the demand, the ld. Commissioner would take into consideration the evidences produced by the Appellant and record a specific finding on the aspect of includability or otherwise of the value of taxable service received against Contracts, with TNSEB & MSEB, in the total demand. Penalty and/or interest, if any, be determined, accordingly - Decided partly in favour of assessee.
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