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2018 (11) TMI 847 - AT - Service TaxBusiness Auxiliary Service - the proceedings were initiated on the misconception that the tax liability, to be discharged on receipt, had not been - Held that:- This was one aspect of the dispute in which attempted reconciliation was reported as having failed. We are unable to comprehend any difficulty in doing so. It should be easy enough to ascertain the claim of discharge of tax liability on accrual basis from the financial records. All that was required to be produced were the invoices pertaining to the payments received from these clients in 2005-06 and the corresponding challans for deposit in the relevant year coupled with the accounting entries of transfer of those very amounts to the ‘bad debt’ ledger. The second unresolved aspect of the dispute is manifested in the demand of ₹ 2,66,604 allegedly short-paid as revealed from the remittance of service tax of ₹ 15,76,659 as ascertained from the returns for the period from 2002-03 to 2004-05 and the alleged liability of ₹ 18,43,263 ascertained by tax authorities from the ‘trial balance.’ Neither in the show cause notice nor in the proceedings before the lower authorities do we find any reference to the entry, or entries, in ‘trial balance’ from which the higher amount had been derived. We are not certain if the said amount has been shown as such in the ‘trial balance’ or if it has been computed by the application of the relevant rate of tax on the consideration reported therein - from the correspondence referred to in the orders of the lower authorities, it would appear that the show cause notice is sketchy on the nature of the allegation against the appellant. It should have been within the scope of the lower authorities, in the course of the reported correspondence, to throw light on the source of the computed figure on the basis of which the alleged deficit was formalised in show cause notice. It is but fair to expect the appellant to respond only thereafter. Alleged and unreported rendering of ‘business auxiliary service’ taxable under section 65(105) (zzb) of Finance Act, 1994 on the consideration received from the various newspaper establishments in which, as ‘accredited agency’ of Indian Newspaper Society - Held that:- From a perusal, it would appear that it is newspaper establishment that pays the appellant for acting as its agent. If that be the indicator of recompense for provision of service, it would appear that the appellant is not the provider of the service to the other agencies which is contrary to the surmise, and conclusion, in the findings of the two lower authorities. From this factual matrix alone, we can deduce that the lower authorities have, in their findings, misdirected themselves, in the determination to fasten tax on the consideration without compliance of the pre-requisite to fit the activity within the framework of one of the taxable services. We see no reason to perpetuate this in the absence of some worthwhile reason to believe that a consummation that would stand the test of appeal exists. We set aside the demands and the attendant detriments but remand the matter back to the original authority for a second time to enable the ascertainment of validity of the contention of the appellant on the discharge of tax liability. - Appeal allowed by way of remand.
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