2018 (7) TMI 336

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....e registered with the Service Tax department for providing these services. They have been paying service tax on the services. Based on the intelligence, an investigation was conducted by the departmental officers and they verified the ST-3 returns filed by the appellants with their Profit and Loss Accounts and found that the appellants have not declared the full value of the services rendered by them and have also not discharged their full service tax liability. When this was pointed out, the appellants paid the differential service tax as calculated by them along with interest which was different from the amounts calculated by the departmental officers. 3. Thereafter show cause notices were issued proposing to recover the differential s....

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....service tax demanded by the department was Rs. 3,92,665/-, while the service tax calculated by the appellant is Rs. 1,19,201/-. In support of their claim, the Learned Counsel for the appellants produced extracts of the Profit and Loss accounts for the relevant periods. I have gone through them. On the right hand side of the Profit and Loss statements, they have receipts recorded as "By Service receipts" and on the left hand side, they had the expenses including their profit and the service tax amount. The right hand side amount matches with the left hand side amount. Thus it is evident that the service receipts indicated in the profit and loss account includes all their costs including the service tax and the net profit. I also find that th....

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....ees were paying service tax and filing ST-3 returns. However, during investigation by the departmental officers they found that there was a difference between the value of service charges reflected in their profit and loss accounts and the value declared in their ST-3 returns. The amount in the Profit and Loss accounts was higher and hence, the entire show cause notice and demand was based on the profit and loss accounts. Having relied on the profit and loss accounts to compute the differential tax liability, the departmental officers cannot brush aside some elements of the same profit and loss statements which are not convenient and consider only the other elements to fasten the liability on the appellant. Profit and Loss statements produc....