Appeal allowed on remand after establishing correct receipt date of original order within limitation period

CESTAT Kolkata allowed appellant's appeal by way of remand after accepting an affidavit establishing 17.01.2023 as the actual date of receipt of the original order. The tribunal found the appeal was filed within the prescribed time limit under Section 37C when calculated from the corrected receipt date. The matter was remanded to the Commissioner (Appeals) to decide on merits after the lower authority had rejected the appeal on limitation grounds due to alleged non-service of show cause notice, which violated natural justice principles.

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Issues involved:
The issues involved in the judgment are the demand of service tax being barred by limitation and the basis for determining service tax solely on the difference between income tax return and 26AS Statement.

Issue 1: Demand Barred by Limitation
The Appellant argued that the demand in the case is time-barred as the proceedings were based on information from Form 26AS of the Income Tax department, which is public information and does not constitute suppression. They contended that there was no evidence of malafide intention or mens rea for tax evasion, thus the extended period of limitation under proviso to Sec. 73(1) of the Act should not apply. Citing the decision in Aban Lyod Chiles Offshore Ltd. vs. CCE, the Appellant emphasized that when all facts were already known to the Department, invoking extended limitation period is unjustified.

Issue 2: Determination of Service Tax
The Appellant argued that the Service Tax Department cannot solely demand service tax based on the difference between Income tax return and 26AS Statement without verifying if the amount received is for taxable services. They referred to cases like Kush Constructions vs. CGST NACIN and Luit Developers Pvt. Ltd. vs. Commissioner, CGST to support their contention that Form 26AS figures alone cannot determine service tax liability without evidence of it being due to a taxable service.

Commissioner's Rejection on Limitation Grounds
The Commissioner (Appeals) rejected the appeal on limitation grounds, stating that it was not filed within the prescribed time limit. The Appellant claimed they did not receive the show cause notice or Order-in-Original timely, and only learned about it later. They filed an Affidavit to consider the date of receipt as the basis for filing the appeal within the stipulated time. The Commissioner (Appeals) did not consider this request, leading to the rejection of the appeal on limitation grounds without discussing the merits.

Decision and Remand
The Tribunal accepted the Affidavit filed by the Appellant and considered the date of receipt as the basis for filing the appeal within the prescribed time limit. Consequently, the impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) to hear the Appellant and decide the issue on merits. The Tribunal directed the Commissioner (Appeals) to decide the matter based on the merits presented by the Appellant.

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