Service tax on contract receipts sustained where no evidence proved exemption, and extended limitation and penalty were upheld.

Service tax demand on contract receipts was sustained because the appellant produced no contracts, reply, or supporting records to show classification, exemption, or abatement. Income-tax records and TDS under Section 194C supported the inference that consideration was received for a taxable activity, and in the post-negative-list regime the relevant enquiry was whether the activity fell within the negative list or an exemption. In the absence of contrary evidence, the taxable value was taken as the full consideration received. Non-filing of statutory returns also justified extended limitation and penalty, which were upheld.

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Issues: Whether the demand of service tax on contract receipts was sustainable in the absence of any documentary evidence from the appellant, and whether the invocation of the negative list regime, extended limitation, and penalty called for interference.

Analysis: The appellant did not respond to departmental notices, did not file a reply to the show cause notice, and did not produce work contracts or any other material to show entitlement to classification, exemption, or abatement. The receipts reflected in the income tax records, on which tax had been deducted at source under Section 194C of the Income-tax Act, 1961, supported the inference that consideration had been received for a taxable activity. In the post-negative-list regime, classification was no longer the central enquiry; the relevant question was whether the activity fell within the negative list or any exemption. In the absence of proof from the appellant, the taxable value was correctly taken as the full consideration received. Non-filing of statutory returns also supported invocation of the extended period and the penalty.

Conclusion: The demand, invocation of extended limitation, and imposition of penalty were upheld, and the appeal failed.

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