Tribunal rules in favor of appellant in service tax case due to lack of specific discrepancies

The tribunal ruled in favor of the appellant, who was accused of short payment of service tax under renting of immovable property services. The tribunal found that the show cause notice lacked specific discrepancies or allegations of incorrect returns, and emphasized that turnover figures cannot be rejected without cogent reasons. As a result, the demand for service tax shortfall was deemed untenable, leading to the setting aside of the order and penalties imposed, granting the appellant consequential relief as per the law.

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Issues: Alleged short payment of service tax under renting of immovable property service

Analysis:
The appellant, engaged in providing services for renting immovable property, faced an issue regarding the alleged short payment of service tax specifically under the renting of immovable property service. The appellant contended that they had paid the correct service tax on the rent amount for the relevant period, maintained proper books of account, and regularly filed ST-3 returns. The show cause notice alleged a shortfall in service tax payment based on various considerations like godowns/warehouses, processing/grading of seeds, T.C. charges, storage, labor charges, and legal fees. The notice claimed a total service tax liability of Rs. 24,04,955, out of which the appellant had paid Rs. 13,69,341, resulting in an alleged shortfall of Rs. 10,35,614. The appellant argued that there was no specific discrepancy in their returns or accounts and presented ledger accounts to support their claim. The authorized representative for the Revenue relied on Form-26AS receipts and final accounts to justify the demand amount. However, the tribunal noted that there were no specific discrepancies or allegations of incorrect returns or improper accounts in the show cause notice. The tribunal emphasized that turnover figures cannot be rejected without cogent reasons or specific discrepancies. Consequently, the demand for service tax shortfall on renting immovable property services was deemed untenable, leading to the setting aside of the impugned order, including the penalties imposed. The appellant was granted consequential relief as per the law.

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