Service tax demand cannot rest on Form 26AS alone; independent evidence and proof of suppression are required.

Service tax liability cannot be sustained merely on figures reflected in Form 26AS without independent evidence linking those entries to taxable consideration. Where the assessee filed ST-3 returns, asserted payment of tax, and the record failed to establish undisclosed services or explain any differential value, the demand is unsustainable. The extended limitation period is also unavailable in the absence of proof of suppression, wilful misstatement, or similar ingredients. On the same footing, penalties cannot survive when the underlying demand is not legally established and the jurisdictional basis for extended limitation is absent.

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Issues: (i) Whether service tax demand could be sustained solely on the basis of figures reflected in Form 26AS without independent corroboration; (ii) whether the extended period of limitation and penalties were invocable on the facts of the case.

Issue (i): Whether service tax demand could be sustained solely on the basis of figures reflected in Form 26AS without independent corroboration.

Analysis: The demand was founded only on entries in Form 26AS, which is a document maintained for income-tax purposes and is not, by itself, a prescribed basis for determination of service tax liability. The appellant had filed ST-3 returns, asserted regular payment of service tax, and produced supporting material showing that the activity was manpower supply service. The record did not establish what other services, if any, were rendered, nor did it explain the difference between the figures in Form 26AS and the declared taxable value. In the absence of cogent evidence, the differential amount could not be presumed to represent taxable consideration.

Conclusion: The demand based solely on Form 26AS was unsustainable and is held against the Revenue.

Issue (ii): Whether the extended period of limitation and penalties were invocable on the facts of the case.

Analysis: The appellant had been filing returns and claiming exemption under Notification No. 15/2012-ST, and the department did not establish suppression, wilful misstatement, or any other ingredient necessary to justify invocation of the larger period. Once the foundational demand itself was unsupported, the consequential penalties under sections 77(2) and 78 also could not survive.

Conclusion: The extended period and penalties were not invocable and are held against the Revenue.

Final Conclusion: The impugned order was unsustainable in law and was set aside, with the assessee obtaining full relief from the disputed demand and consequential penalties.

Ratio Decidendi: A service tax demand cannot be sustained merely on the basis of Form 26AS entries without independent evidence proving taxable service value, and the extended period cannot be invoked absent proof of suppression or wilful misstatement.

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