TaxTMI 
TaxTMI 
2022 (8) TMI 928
X X X X Extracts X X X X
X X X X Extracts X X X X
....investigation it appear to the department that the appellant provided services to various state and central government departments and have received an amount of Rs.44,40,35,710/- during the period and have not paid any service tax as applicable. Accordingly, a show cause notice dated 21.10.2019 was issued to the appellant and the same was confirmed by the impugned order vide which service tax of Rs.6,39,09,190/- was confirmed along with interest and equal penalty. Hence this appeal. 3. Shri M. P. Bagaria Learned Chartered Accountant appearing on behalf of the appellant and submits that vide written submission dated 23.12.2019 before the commissioner and during the personal hearing on 15.10.2021 the appellant explained that all the works were executed for government departments and are in progress; all the work is exempt; related documents have already been submitted to the department. He submits that as can be seen from the works contracts and invoices the appellant provided the services to PWD authorities, Air Port Authority of India, Indian Railways and Oil India Ltd. in construction, erection, commissioning, installation, completion, fitting out, repairs, maintenance, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ification No. 25/2012-ST dated 20.06.2012 cannot be extended as claimed by the notice" and that " Therefore, I have no other option but to maintain the allegation made in the show cause notice. We find that the manner in which the allegation were raised in the show cause notice and confirmed by the impugned order is not legally correct. We find that as the department is alleging that the appellants have evaded payment of service tax, it is incumbent upon the department to prove the same with reliable evidence. We find from the impugned proceedings that the details of payment received by the appellant were gleaned from the 26 AS statements and other document, like ledger, profit and loss account, balance sheet etc. Thereafter, the appellant was asked to submit the necessary details like work orders, invoices etc. No other investigations to prove that the appellants have rendered taxable service and received remuneration for the same, were conducted. The Department has not even bothered to collect necessary documents from the respective government authorities at whose behest, the appellant is alleged to have under taken the works orders. The nature of such works alleged t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at appellant was required to pay short paid service tax of around Rs.8 crores for the said period than the information that was available in returns in the form 26AS. In this regard we note that this Tribunal had an occasion to examine sustainability of demand raised only on the basis of form 26AS. It was held by this Tribunal in the case of Sharma Fabricators Pvt. Ltd. Vs Commissioner of Central Excise, Allahabad reported at 2017 (5) GSTL 96 (Tri.-All.) as follows:- "3. Heard the ld. Counsel for M/s. Sharma he has basically argued that the said Show Cause Notices were not issued by examining the books of account maintained by M/s. Sharma. The Show Cause Notices were based on the presumptions and third party information. He has argued that even when the payments were not made by the clients but the clients booked the expenditure in their books of account they were required to pay the related tax deducted at source to the exchequer and issue a certificate of TDS and incorporate the same in the return called 26AS filed with the Income Tax Authorities and such information cannot be the basis for arrival of the consideration received by the service provider. He has submitted t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke a view whether there is a sustainable case for issue of Show Cause Notice. Such vital aspects of framing of charges have been missing in the present case. The charges in the Show Cause Notice have to be on the basis of books of account and records maintained by the assessee and other admissible evidence. The books of account maintained by M/s. Sharma were not looked into for issue of abovestated two Show Cause Notices. Therefore, the transactions recorded in the books of account cannot be held to be contrary to the facts. Therefore, we hold that the said Show Cause Notices are not sustainable. Since the said Show Cause Notices are not sustainable, appeal bearing No. ST/890/2010 filed by M/s. Sharma is allowed and appeal bearing No. ST/949/2010 filed by Revenue is dismissed. Miscellaneous Applications also stand disposed of. Cross Objection also disposed of." From the record it is very clear that none of the records of appellant were taken into consideration for framing of charges that appellant had short paid service tax to the tune of around Rs.8 crores and the said charges were framed only on the basis of information in the form 26A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....6/2019 in the case of M/s Pappu Crane Service by Allahabad Bench in service tax appeal no. ST/70707/2018 (DB). In view of the above we find that the demands raised and confirmed in the impugned order are not sustainable. 8. Moreover, the appellants submits the issuance of the show cause notice is in-violation of circular issued by CBIC. We find that CBIC vide circular no. 1053/02/2017 dated 10.03.2017 instructs the officers as under. " Consultation with the noticee before issue of Show Cause Notice: Board has made per show cause notice consultation by the Principal Commissioner/Commissioner prior to issue of show cause notice in case involving demands of duty above Rs.50 Lakhs (except for preventive/offence related SCN's) mandatory vide instruction issued form F. No. 1080/09/DLA/MISC/15, dated 21st December 2015. Such consultation shall be done by the adjudicating authority with the assessee concerned. This is an important step towards trade facilitation and promoting voluntary compliance and to reduce the necessity of issuing show cause notice." 8.1 We find that in the following cases it has been held that non adherence to the instructions issued regardi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Conference/2016/ 2096/02148, dated 13-10-2016, further clarifies the consultation process in the following terms :- 'Subject : Pre-show cause notice consultation in cases other than those detected by Preventive/Anti-Evasion and amount involved being more than Rs. 50 lakhs - Reg. Please refer to the notification issued vide F. No. 1080/11/DLA/CC Conference/2016, dated 28th June, 2016, wherein it has been clarified that the pre-show cause notice consultation with the assessee concerned shall be done by the adjudicating authority. 2.0 Certain doubts have been further expressed with regard to this. As per Circular No. 985/09/2014-CX, dated 22-9-2014 Audit Commissionerate has been made responsible to issue the show cause notices, wherever necessary, after the audit objections are confirmed in the MCMs. Such show cause notices are answerable to and adjudicated by the Executive Commissioner or the Subordinate officers of the Executive Commissionerate as per the adjudication limits. In such cases, show cause notice issuing authority and adjudicating authority are different. 3.0 Hence, it is clarified that in cases where show cause notice issuing&n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... present case, the objections dated 7-5-2018 are in general terms. The document furnished to the Department is of the year 2004, whereas enquiry is between October, 2012 and June, 2017. The business activities and methods of doing business are likely to have changed over the years. There is also no reference, as rightly pointed out by Mr. Chopda to the order of CESTAT, dated 28-3-2018. However, there has been no opportunity extended to the assessee for a face to face with the assessing officer, which, in my view, is what a 'consultation' entails. One could argue as Mr. Chopda has, that no personal hearing has been sought in this case and in any event, it will be afforded by the respondents prior to his decision whether to confirm the proposals in the show cause notice or otherwise. 16. That may be so. However, the import of the Circular/Instruction has to provide a medium for 'consultation' between the assessee and the Department. In fact, Master Circular dated 10-3-2017 uses the phrase 'such consultation shall be done by the Adjudicating Authority with the assessee concerned'. 17. According to Black's Law Dictionary, the word 'consultation' is defined....
X X X X Extracts X X X X
X X X X Extracts X X X X
....suance of show cause notice, if at all found necessary. 8.3 Hon'ble High Court of Delhi in the case of Amadeus India Pvt. Ltd. (supra) held that 2. The mandatory character of the Master Circular can be traced to Section 83 of the Finance Act, 1994 which makes Section 37B of the Central Excise Act, 1944 applicable in relation to service tax. In terms Section 37B of the Central Excise Act, 1944 instructions issued by the CBEC would be binding on the officers of the Department. 3. The legal position in this regard is well-settled. Illustratively a reference may be made to the decision in State of Tamil Nadu v. India Cements Ltd. (2011) 13 SCC 247 (SC). Specific to the Master Circular, a reference may be made to the judgment dated 9th February, 2018 passed by the High Court of Judicature at Madras in W.P. (C). 11858/2017 (Tube Investment of India Ltd. v. Union of India) [2018 (16) G.S.T.L. 376 (Mad.)]. In that case, after noticing that para 5.0 of the Master Circular was not adhered to, the High Court set aside the SCN challenged and delegated the parties to stage priorto the issuance of the SCN. 4. In the present case, the Court is....