Service tax enhancement per cable connection failed for lack of evidence supporting the revised collection basis.

Enhancement of service tax liability based on an inferred higher collection per KTV connection was unsustainable where the seized register and relied-upon statements did not establish collection at the revised rate. The material supported only the lower amount per connection, and the adjudicating authority had correctly accepted that basis. The revisionary order therefore lacked evidentiary support, and the revised demand and penalty were set aside in favour of the assessees.

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Issues: Whether the Commissioner was justified in revising the service tax liability by enhancing the taxable collection per connection from Rs.20 to Rs.200 for individual cable operators.

Analysis: The enhancement was based on a register showing the number of KTV connections and on statements relied upon to infer that each operator collected Rs.200 per connection. The order found no basis for treating the sums shown in the seized register as evidence of a Rs.200 collection per connection. The material instead supported only the payment of Rs.20 per KTV connection, and the adjudicating authority had correctly accepted that position.

Conclusion: The revisionary enhancement to Rs.200 per connection was not sustainable and the issue was decided in favour of the assessees.

Final Conclusion: The service tax demand and penalty as revised were set aside and the appeals were allowed.

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