Form-26AS alone cannot sustain a service tax demand without independent verification of receipts and valuation.

A service tax demand based solely on Form-26AS, without independent verification of the assessee's receipts, liabilities, or valuation under the applicable rules and exemption/abatement provisions, was held unsustainable. The third-party tax statement could not be the sole basis for confirming demand, particularly where the assessee was registered, had filed returns, and the order was passed ex parte. The extended period of limitation was also found not invocable on the facts recorded. The impugned order was set aside and consequential relief was granted.

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Issues: (i) Whether service tax demand could be sustained solely on the basis of Form-26AS obtained from the Income Tax Department without independent investigation into the appellant's receipts and liabilities; (ii) Whether the extended period of limitation was invocable in the facts of the case.

Issue (i): Whether service tax demand could be sustained solely on the basis of Form-26AS obtained from the Income Tax Department without independent investigation into the appellant's receipts and liabilities.

Analysis: The appellant was a registered service provider and had filed service tax returns. The demand was raised on the basis of Form-26AS and there was no independent investigation at the appellant's end by the adjudicating authority. The order was also passed ex parte. In such circumstances, and having regard to the requirement that valuation and computation be undertaken in accordance with the applicable valuation rules and the relevant exemption notification, the mere third-party tax statement could not form the sole basis for confirming the demand.

Conclusion: The demand was not sustainable on the basis of Form-26AS alone and this issue is decided in favour of the assessee.

Issue (ii): Whether the extended period of limitation was invocable in the facts of the case.

Analysis: The proceedings covered an extended past period, including a part beyond five years, while the dispute involved valuation and applicability of exemption/abatement related provisions. On the facts recorded, the Tribunal found no basis to invoke the extended limitation period.

Conclusion: The extended period of limitation was not invocable and this issue is decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: A service tax demand cannot be sustained merely on the basis of Form-26AS in the absence of independent verification, and the extended period of limitation cannot be invoked without a legally sustainable basis on the facts found.

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