2017 (1) TMI 806 - AT - Service Tax

Tribunal overturns Service Tax demand on catering services due to lack of evidence.

The Tribunal allowed the appeal filed by M/s Pati Ram Sonu Kumar Catering House, setting aside the demand of Rs. 2,62,174 for Service Tax on outdoor ... Outdoor catering services - demand of tax, interest and penalty - Held that: - the said SCN is issued only on the basis of statement dated 01.05.2007, recorded as stated above and the contents of the SCN have not been corroborated with any other evidence, including the evidence emerging out books of accounts of the appellant or the invoices said to have been issued by the appellant. The appellant has admitted Service Tax liability of which was already paid - the SCN is not sustainable in so far as, demand of ₹ 2,62,174/- of Service Tax is concerned - demand of tax, interest and penalty set aside - appeal allowed - decided in favor of appellant. Issues:- Appeal against Order-in-Appeal No.469-ST/APPL/KNP/2010 dated 13.09.2009- Allegation of evasion of Service Tax based on a statement- Lack of corroborative evidence for the show-cause-notice- Admission and payment of Service Tax liability by the appellant- Penalties imposed under Section 78 and Section 76 of Finance Act, 1994Analysis:The appeal was filed against Order-in-Appeal No.469-ST/APPL/KNP/2010 dated 13.09.2009, where the appellant, M/s Pati Ram Sonu Kumar Catering House, challenged the demand of Service Tax amounting to Rs. 5,24,515 on outdoor catering services, along with proposed interest and penalties. The show-cause-notice was issued based on an inspection of other business premises, leading to the recording of a statement by Shri Krishan Kumar Agarwal, the authorized person and accountant of the appellant. The investigation considered the total consideration received by the appellant for specific years, and the notice highlighted the appellant's failure to submit books of accounts or invoices. The Original Authority confirmed the demand, penalties under Section 78 and Section 76 of the Finance Act, 1994, and the amount voluntarily deposited by the appellant. The appeal before the Ld. Commissioner (Appeal) was decided in favor of upholding the Original Authority's decision, leading to the appellant approaching the Tribunal.During the hearing, the appellant's counsel argued that the show-cause-notice solely relied on Shri Krishan Kumar Agarwal's statement without any corroborative evidence, questioning the substantiation of the alleged evasion of Service Tax. The counsel acknowledged and accepted the tax liability of Rs. 2,62,341, which had already been paid, emphasizing no need for reconfirmation. On the other hand, the Revenue's representative supported the impugned Order-in-Appeal.Upon consideration of the arguments presented, the Tribunal, represented by Mr. Anil G. Shakkarwar, found the show-cause-notice lacking sustainability as it was solely based on the statement recorded on 01.05.2007 without corroboration from other evidence such as the appellant's books of accounts or invoices. Given the appellant's admission and payment of the Service Tax liability, the Tribunal set aside the demand of Rs. 2,62,174, along with all penalties imposed in the Order-in-Original and the directed interest on the total amount. Consequently, the appeal was allowed, providing relief to the appellant from the disputed demands and penalties.