Documentary proof for exclusion of goods sold required before treating disputed receipts as taxable service income; matter remanded for verification.

Where disputed receipts could not be conclusively classified on the existing record, the matter was remanded for fresh verification of invoices, books of account and connected documents. The tribunal noted that the claimed exclusion under Notification No. 12/2003-ST depended on documentary proof that part of the receipts represented goods sold rather than taxable service income. Because the ledger entries and supporting records gave conflicting indications, the confirmation of demand was set aside for limited fresh adjudication on the true nature of the receipts and the actual taxable value.

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Issues: Whether the differential receipts shown in the income-tax return and the service tax return required fresh verification to determine whether they represented taxable service income or trading sales eligible for exclusion, and whether the matter should be remanded for examination of supporting documents.

Analysis: The dispute turned on whether the amount treated by the revenue as suppressed service receipts was trading sale proceeds. The exemption under Notification No. 12/2003-ST was relevant because it permits exclusion of the value of goods and material sold, subject to documentary evidence. The record indicated conflicting factual findings regarding the ledger accounts, invoices, and the nature of the receipts. In these circumstances, a final determination of the taxable value could not be made without examining the invoices, books of account, and connected documents.

Conclusion: The matter required remand to the Commissioner for fresh examination of the relevant documents and for determination of the actual taxable services.

Final Conclusion: The confirmation of demand was set aside for limited fresh adjudication on the nature of the receipts and the assessee was required to produce the supporting records.

Ratio Decidendi: Where the nature of disputed receipts cannot be conclusively determined from the existing record and exemption depends on documentary proof of sale of goods, the matter must be re-examined on the basis of the relevant books and invoices before taxing the receipts as service income.

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