2023 (11) TMI 15

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....Nasik and M/s. Siemens, Navi Mumbai which were found during one of the audits, from the balance-sheet copies, Income Tax statement copies and other documents obtained from the Income Tax Department, but however, the assessee-appellant refused to produce the documents required for statutory auditing. From the above, it was understood by the Revenue that the appellant had undertaken sub-contracting agreement for the provision of service under erection and commissioning services. 2.2 The Show Cause Notice also refers to various communications as mentioned in paragraph 5 therein, with a further allegation that the assessee-appellant did not respond to any of those letters. 2.3 The Commissioner who issued the Show Cause Notice thus proceeded to propose a consolidated tax liability without specifying the service provided by the appellant, as per the table at paragraph 6 of the Show Cause Notice, thereby alleging that the appellant had suppressed facts by not taking registration of all the services rendered during the period 2007-08 (October to March) to 2011-12. 3. The assessee-appellant appears to have filed a suitable reply vide letter dated 21.10.2013, copy of which is placed....

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....hem were duly enclosed. (k) In the statement as certified by the chartered accountant, the difference between the balance-sheet figures and the S.T.-3 figures were explained, but none of the above were considered by the officer issuing the Show Cause Notice. (l) In the statement certified by the chartered accountant, they had categorized the differences between the balance-sheet figures and the S.T.-3 figures, as under: - i. Amounts received in the year 2009-10, but relates to works already executed in the year 2008-09 and for which the main contractors had discharged Service Tax; ii. Cost of materials reimbursed by Metro Water Board, which form part of only supply portion of the Operation and Maintenance Contract and not the service portion; iii. Income earned for carrying out horticulture work, which is non-taxable; iv. Income earned for service rendered to Railways in connection with infrastructure development, which is excluded from taxable service. v. Income earned from renting of residential premises; vi. Amount received for sub-contract work done to M/s. Siemens, M/s. Graphite, etc., with evidence of pay....

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....hen relevant information required for classification of service under respective categories were not furnished, the appellant cannot throw the burden on the Department; when the Notice had completely shifted the burden of proof on the assessee, the non-specification of classification could not be considered as being fatal to the validity of the Notice. 6. It is against this order that the present appeal has been filed before this forum. 7. Quite strangely, non-consideration by the Department as to its earlier audits, Show Cause Notices, etc., are conspicuously absent not only in the Show Cause Notice, but also in the Order-in-Original. In the interests of justice, there was no harm in bringing proper facts on record. In fact, we are reminded of reprimanding by higher judicial fora when a litigant goes before a court of law not with clean hands. 8. Heard Shri V. Ravindran, Ld. Advocate for the appellant, and Shri N. Satyanarayanan, Ld. Assistant Commissioner defending the order of the Commissioner. 9.1 The Ld. Advocate would submit at the outset that the following Show Cause Notices were issued to the assessee-appellant: - Sl. No. Show Cause Notice No. Date of i....

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....ather, a consolidated tax liability has been worked out, which makes it indefensible. Moreover, after going through the reply and explanation filed by the assessee to the Show Cause Notice, we find that the Revenue has not properly answered the arbitrariness in proceeding further, in an unfair manner thereby recording that which is convenient rather than placing proper facts on record as to the earlier Show Cause Notices, earlier audits in 2010 and 2012. The above has, therefore, resulted in an overlapping demand, which though pointed out in the reply to the Show Cause Notice, but however, the lower authority has not bothered to discuss about the pleadings of the appellant. 12.2 It is not only about the overlapping demands, it mainly highlights the fact that the activities of the appellant were in the knowledge of the Department and that there was nothing that the appellant suppressed, which fact has been conveniently ignored by the lower authority. Hence, on this ground alone, it becomes very difficult for us to sustain the demand invoking the extended period of limitation. 13.1 In this regard, it is relevant to note the decision of the Hon'ble Apex Court in the case of Comm....

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....red to the department that respondents were not discharging service tax on entire amount received and entire services rendered by them, the department addressed NLC for details about the payments made to respondents. The same was provided by NLC and on the basis of these details furnished by NLC, around 180 show cause notices were issued to various contractors. After personal hearing and adjudication, in two of the matters, (A. Manickam and C. Vadivelu), the adjudicating Commissioner dropped the proceedings for the reason that the show cause notice was vague and did not specify the correct classification of services rendered by the appellant and therefore not legal and proper. In other cases, while the original authority confirmed the demand along with interest and imposed penalties, however, in appeal, Commissioner (Appeals) set aside the demand on the same ground that the show cause notices did not specify the correct classification of services and the demand was vague and therefore not legal and proper. Being aggrieved, the department filed appeals before the Tribunal and vide Final Order Nos. 4700 to 4753/2014 dated 25.8.2014, as stated above, matter had been remanded to the ad....