Service Tax Demand Quashed on Works Contracts; Double Tax Bar and No Extended Period Under Section 73

CESTAT allowed the appeal, setting aside the demand of service tax, interest and penalties under Works Contract Service. It held that the entire service tax on the relevant works contracts had already been discharged by the service recipient (PVVNL), and once the Revenue accepted such tax without refunding it, a second demand on the same taxable services from the appellant was impermissible. The Tribunal further held that invocation of the extended period was unsustainable, since the figures were drawn from the appellant's ITR/Form 26-AS, public documents which negate any allegation of suppression or wilful misstatement.

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Issues involved:
The issues involved in the judgment are the dismissal of appeal by the Commissioner (Appeals) upholding the Order-in-Original, demand raised based on third party information from Income Tax Department, confirmation of demand and penalties under various sections of the Finance Act, 1994, claim of double taxation, and invocation of extended period of limitation.

Dismissal of Appeal:
The appeal was filed by the Appellant against the Order-In-Appeal dated 21.06.2023, passed by the Commissioner (Appeals), Customs, Central Excise & CGST, Allahabad, which dismissed the appeal and upheld the Order-in-Original.

Demand Based on Third Party Information:
The demand was raised on the basis of third party information obtained from the Income Tax Department, specifically from the ITR/Form 26-AS for the F.Y.-2016-17, alleging that the Appellant had not paid Service Tax on the income shown in the ITR.

Confirmation of Demand and Penalties:
The Order-in-Original dated 31.12.2022 confirmed a demand of Rs.6,34,476/- and imposed penalties under Sections 78, 77(1)(a), 77(2), 77(1)(c) & 70 of the Finance Act, 1994, based on the adjudication of the Show Cause Notice.

Claim of Double Taxation:
The Appellant claimed that the service receiver had already paid the entire service tax amount on the works contract services provided by the Appellant, and invoking double taxation would be unjustified as per the Tribunal's decision in the case of M/s Navyug Alloys Pvt. Ltd.

Invocation of Extended Period of Limitation:
The Tribunal found that the demand was barred by limitation as the figures were picked from the Income Tax Return, which is considered a public document, and there was no suppression or misstatement by the Assessee. Citing various decisions, including the case of C.S.T., New Delhi v. Kamal Lalwani and Commissioner of Central Tax v. Zee Media Corporation Ltd., it was concluded that the extended period was not invocable in this case.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal filed by the Appellant with consequential relief, as per law.

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