TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 72
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..../94 dated 28.6.1994. 2.1 The appellant raises bills against subscribers in respect of cellular mobile telephone service for the gross amount, The trial balance of the appellant for the financial year 2004 - 2005, 2005 - 2006 and 2006 - 2007 were scrutinized in detail. It was found that there was a huge difference between credit balance items in the nature of subscriber service charges shown in the trial balance and the value of taxable services billed during the financial year 2004 - 2005, 2005 - 2006 and 2006 - 2007 as furnished by the appellant. From the half-yearly ST-3 returns filed every half year during the financial year 2004 - 2005, 2005 - 2006 and 2006 - 2007, it appeared that the appellant have not assessed and paid appropriate service tax in respect of the services being rendered by them. This is manifest when the service tax and education cess paid in respect of services rendered is juxtaposed with the gross value of service received during the financial year 2004 - 2005, 2005 - 2006 and 2006 - 2007. Appellant has incorrectly computed the service tax by not taking into account the entire gross value of service rendered and received. As mentioned ibid as per section 67 ....
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....ided in Rule 6 of the Service Tax Rules, 1994 (STR 1994). Thus, both the Trial Balance and Profit and Loss Account of the Appellant can never reflect similar values, as they are meant for different purposes and adopt different accounting mechanisms. She further submitted that no allegation of suppression can be foisted against the Appellant since the demand is based on the books of accounts and financial statements scrupulously maintained by them. No penalty can be imposed as there has been no contravention of any of the provisions of the Act or the concerned rules. She hence prayed that the impugned order may be set aside. 6. Shri N. Satyanarayanan, learned Assistant Commissioner (AR) for the department has reiterated the points stated in the impugned order. 7. We have heard the rival parties and carefully perused the appeal. We find that the dispute relates to discrepancies between credit balance of subscriber service charges shown in the Trial Balance and the value of taxable services during the financial years 2004 - 2005, 2005 - 2006 and 2006 - 2007 as noticed in the ST-3 Returns, by the department. The preliminary objection raised by the appellant need to be dealt with befo....
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....y. It can be relied upon after offering assesses an opportunity to explain the information contained therein or by some independent evidence or after being authenticated by a responsible company official that the entries represent real transactions and that the monies were paid in accordance with those entries. This would undoubtedly require the assesse's unstinted cooperation in admitting and disclosing facts within their special knowledge, at least when asked. It is also relevant to note that although Rule 5A of Service Tax Rules, 1994 was inserted vide Notification No. 45/2007, dated 28.12.2007, it prescribes a trial balance or its equivalent; and the income-tax audit report under section 44AB of the Income-tax Act, 1961 (43 of 1961), among other documents/ records for the scrutiny of the officer or audit party, as the case may be. This is only to bring out the pivotal role played by these documents/ records in the scrutiny of assessments and for time sensitive compliance verification by the department, which was formalized by the insertion of Rule 5A ibid. 7.1.2 The next issue raised by the appellant is that the onus of establishing taxability and to show that there is underst....
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.... other words, prior to 01/04/2011 the taxpayers were required to follow the 'Cash System of Accounting' which was changed to the 'Accrual Basis of Accounting' after the POTR was introduced. From the impugned order it is seen that the Original Authority has also accepted the same. As per section 67 of FA 1994 as amended, the value of any taxable service shall be the gross amount charged by the service provider for such services provided for the purpose of charging service tax. When the appellant failed to reconcile the information declared in the ST-3 Return with that seen in their company's Trial Balance, he confirmed the duty relying upon the decision of the Tribunal in Ideal Security vs. CCE, Allahabad [2011 (23) S.T.R. 66 (Tri. - Del.)] to hold that the onus of proof was on the appellant (assessee) to substantiate their claim with tangible evidence, which they have failed to do. The appellant has submitted before us that the decision in 'Ideal Security' (supra) is factually distinguishable and is not applicable to the instant dispute. In 'Ideal Security', the dispute revolved around whether statutory payments such as ESI, PF, etc. should have been brought to tax. In this context....
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....his issue and sought to be distinguished by the appellant is reproduced below: "9. We do agree with the ld. Appellate Authority in the matter of the discrepancy noticed by him in respect of the considerations received and appearing in different manner in two different statutory documents. While the ST 3 return was statutory document under Finance Act, 1994, the balance-sheet and profit and loss account were statutory documents under Companies Act, 1956. Therefore, when the public documents bring the discrepancy, the onus of proof was on the assessee to come out with clean hand to prove its stand." (emphasis added) We are in agreement with the legal position stated by the Co-ordinate Bench in 'Ideal Security' (supra) and relied upon by the Original Authority. 7.1.5 Having found that the SCN was issued correctly and not hit by any legal bar, we proceed to examine the other issues involved. 8. The remaining issues stated by the appellant are as under; A. It is a settled legal position that treatment in the books of account is not determinative of tax liability. B. International inbound roaming Service is not liable to Service tax. C. While holding that interconnection usa....
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....xclusive knowledge, that has led to an adverse inference and to the issue of the SCN. If it was the appellants apprehension that the question of taxability had not being addressed correctly in the Show Cause Notice, they had an opportunity to put forward the facts and evidences, including the relevant ledger entries, available with them when asked to reconcile data during the dispute resolution process. It would have helped the Original Authority to evaluate whether the accounts were indeed maintained on an accrual basis or on receipts basis. By their failure to give any information on facts which would controvert the allegations in the SCN the inference drawn by the Original Authority in the impugned order cannot be faulted. As stated earlier, the Apex Court in A. Raghavamma vs A. Chenchamma (supra) held that adverse inference could be drawn against the assessee, if he failed to put before the Department material which he was in exclusive possession. While the question of taxability is to be decided according to the principles of law, what was the factual accountancy practice followed must be disclosed with evidence so as to examine the applicability of the principles of law invol....
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.....L. 557 (Tri. - Chennai)]. - Notice issued in Revenue Appeal pending in Hon'ble Supreme Court bearing Diary No. 40710/2019 with no interim stay. Difference of opinion in subsequent order in Vodafone Idea Ltd. v. CCE & ST, Coimbatore Commissionerate [2022 SCC Online CESTAT 635] and the judgement has been reserved vide Order dated 20.04.2023 in ST/41087/2015. b. Vodafone Essar Cellular Limited vs. CCE, Pune [2013 (31) S.T.R. 738 (Tri. - Mumbai] - Revenue Appeal to Hon'ble Bombay High Court admitted in Central Excise Appeal Nos. 283 - 286 of 2013 in Commissioner v. Vodafone Essar Cellular Ltd. [2016 (41) STR J47 (Bom.)]. c. Vodafone Cellular Ltd. v. CCE, Pune-III [2014 (34) STR 890 (Tri. - Mumbai)] - Appeal to Hon'ble Bombay High Court admitted in Central Excise Appeal 220 of 2014 in Vodafone Cellular Ltd. v. Commissioner [2016 (41) STR J113 (Bom.)]. d. CST, Mumbai-I v. Vodafone India Ltd. [2015 (37) STR 286 (Tri. - Mumbai)] - Revenue Appeal to Hon'ble Supreme Court in Civil Appeal Diary No. 38259 of 2014 in Commissioner v. Vodafone India Ltd. [2015 (38) STR J431 (SC)]. The Original Authority has agreed that international in-bound roaming subscriber shall not be required to be ....
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....deposit cannot be charged to service tax because it is refundable by the Appellant to their post-paid customers (Rs.48,82,163/-). 12.1 The Appellant submits that activation deposit is a refundable amount collected from post-paid subscribers as a security deposit at the time of purchase of SIM cards. It is refunded upon surrender of mobile network connection by the customer, and thus, no service tax liability can be fastened on the Appellant on this amount. They have also relied upon the following case laws that security deposit cannot form part of taxable service provided by the Assessee: i. Vardhman Developers v. Commissioner, Central Goods & Service Tax [(2022) 136 taxmann.com 330 (New Delhi - CESTAT)]. ii. Samir Rajendra Shah v. CCE, Kolhapur [2015 (37) STR 154 (Tri. - Mum.)]. 12.2 We find that the appellant has made an inference without presenting any fact that the deposits were actually refunded. Merely labelling a payment receipt as 'security deposits' and making inferences about their treatment in law will not suffice. The Apex Court in Suresh Budharmal Kalani v. State of Maharashtra [(1998 (7) SCC 337)] has held that "A presumption can be drawn only from facts and no....
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....[2011 (21) S.T.R. 290 (Tri. - Del.)] "5. The basic principle that Service tax being destination based consumption tax, till the service reaches its destination, that contributes to the proposition that all expenses incurred till that point and time become essential consideration of cost of service. Agreement of parties in respect of modality of payment of valuable consideration towards service provided does not matter for Revenue. In whatever manner the recipient and provider of taxable service arrange their affairs for their benefit or mutuality to deal with consideration that is also immaterial to Revenue. Service Valuation Rule of 1994 contributes to the above fiscal philosophy and the destination based consumption tax submit for taxation on the gross value of taxable service which is measure of taxation. The gross value takes into its fold entire cost of service enabling that to be performable. Therefore, by no stretch of imagination neither the arrangements of the parties nor their mutuality or nomenclature or format of their agreement and mode of discharge of consideration shall prevail on the law relating to service tax. Legislature accordingly intend that the gross value ....
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....ccount of inordinate delay in adjudication: a) Yangir Properties & Trading Ltd. v. Union of India [2021 (376) ELT 403 (Guj.)] - Notice issued in Union of India v. Yangir Properties & Trading Ltd. [2021 (378) ELT A20 (SC)]. b) Siddhi Vinayak Syntex Pvt. Ltd. v. Union of India [2017 (372) ELT 455 (Guj.)] - Appeal disposed on account of monetary limit not being adhered to in Union of India v. Siddhi Vinayak Syntex Pvt. Ltd. [2022 (379) ELT 553 (SC)]. c) Steel Authority of India Ltd. v. Office of Asst. Comm. of GST & CE and Ors. [Final Common Order dated 25.11.2022 in WP Nos. 17201, 17202, 17204, 17205, 17208, 17210 of 2020] - Department has gone on appeal against this decision in WA Nos.1369, 1371, 1373, 1377, 1379, and 1380 of 2023 with no interim stay. d) Meghmani Organics Ltd. v. Union of India [2019 (368) ELT 433 (Guj.)].Kamdhenu Exim Pvt. Ltd. v. Union of India [2019 (368) ELT 303 (Guj.)]. We find that the appellant has not disclosed any facts on which the inference was made by them. It is not disclosed whether the delay, if any, was on the part of the Adjudicating Authority or caused by the appellant themselves. This is even more relevant as it was pointed out in the im....