CESTAT allowed the appeal and set aside the impugned order,...

CESTAT allowed the appeal and set aside the impugned order, holding that the service tax demand was unsustainable. The Tribunal found the demand rested solely on Form 26AS and third-party data without examination of reasons for variance, exemptions or abatements, and that the appellant had maintained records and sought rectification which remained undecided. The appellant qualified for SSI threshold exemption and filed nil returns accordingly; thus the department's presumption that differential receipts were taxable consideration was impermissible. Invocation of the extended period was held improper and the show-cause notice was time-barred. Consequently the demand and penalty were quashed and the appeal was allowed.

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