TaxTMI 
TaxTMI 
2024 (2) TMI 198
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....work out the tax liabilities. The appellant had shown these amounts as negative debtors, in their list of outstanding debtors. According to department, this resulted in negative balance amount not being subject to levy of service tax even though these are advance payments. Thus, appellant had short paid the service tax for the period October 2008 to March 2012. The SCN dated 28.08.2014 was issued for the above period proposing to demand the short paid Service Tax along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. Aggrieved, the appellant is now before the Tribunal. 2. The Ld. Counsel Shri Harish Bindumadhavan appeared and argued the matter. The impugned Order has found that the negative items under the head "Debtors" recorded by the Appellant in their accounts pertains to advances received by the Appellant from its customers on which Service Tax has not been discharged. Accounting of expenses charged by network firms: 2.1 It is submitted that the above finding is erroneous as the fact is that the negative items pertain to the expenses charged by the network firms of the Appellant ....
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....ents on which Service Tax is payable but are expenses charged by network firms. B. Show Cause Notice is vague: 2.10 It is submitted that the SCN is vague and lacking in detail. It merely refers to the entries in the financials of the Appellant and the charging and valuation provision under the Finance Act for Chartered Accountant services and held that the said entries pertain to advance received towards the Chartered Accountant services provided by the Appellant which attract Service Tax. 2.11 The SCN does not refer to the specific transaction which is sought to be taxed, the relevant invoices, the specific service provided by the Appellant, the manner in which the value is arrived at and the recipient of service. 2.12 It is submitted that for the above reason itself SCN shall be held to be not sustainable in Law and the demand shall be found bad in Law as the SCN being the foundation of the case and being vague, lacking details and/ or unintelligible. In the instant case, the Show Cause Notice is merely based on assumptions and lacks details on what service/ transaction it specifically seeks to demand Service Tax on and how the valuation of the service is arrived at in the ab....
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....are received. The whole proceedings have been initiated and carried out on the basis of assumptions without identification of the transactions or services provided on which the Service Tax is sought to be levied and also without any identification of who is the service recipient. 2.18 It is settled position of Law, that demand of Service Tax cannot be raised merely on basis of entries in books of accounts without proving service rendered, consideration received and existence of service recipient. Therefore, the demand in the instant case is not sustainable in Law. In this regard, reliance is placed on the following cases: * M/S Futura Polyester Ltd. v. Commissioner of Central Excise, 2013 (1) TMI 658 - CESTAT CHENNAI * M/S KJS Cement Ltd. v. Commissioner of CGST, 2023 (12) TMI 903 - CESTAT NEW DELHI * Indian Machine Tools Manufacturers Association v. Commissioner of Central Excise, Panchkula, (2023) 11 Centax 213 (Tri.-Chan) * Synergy Audio Visual Workship P. Ltd. v. Commissioner of S.T., Bangalore, 2008 (10) S.T.R. 578 (Tri.-Bang.) * M/S. Go Bindas Entertainment Pvt. Ltd. v. Commissioner of Service Tax, 2019 (5) TMI 1487 - CESTAT ALLAHABAD E. Rebuttal to the findings i....
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....his fact is relevant to show that the expenses accounted by the Appellant as negative items under the head of "Debtors" are towards services received by the Appellant on which Service Tax has been paid to the Government. 2.24 In this regard, the Appellant has relied upon the CENVAT Register and sample correlation statement (Exhibit-O). iv. There can be no comparison with the three payments for which payment of Tax was made by the Appellant: 2.25 It is submitted that the impugned Order has erred in comparing the payment of Service Tax made by the Appellant on payments received by them from the client with the expenses charged and accounted as negative item under the head "debtors". It is submitted that such comparison is contrary to facts and absurd. 2.26 It is submitted that in Para 7 of the Audit Report No. 68 (S.T.)/2013-14 dated 13.02.2014, three bills were pointed out towards which the Appellant had received payment directly from client without information from them. In the said para, the Appellant was required to make payment of Service Tax. Since the payments were received from client, the Appellant made due payment. 2.27 However, the instant demand pertains to observati....
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....tructions P. Ltd. v. Commissioner, 2023 (12) TMI 1211 - CESTAT NEW DELHI * M/s. Raghuvar (India) Ltd. v. Commissioner, Central Excise, 2023 (1) TMI 932 - CESTAT NEW DELHI * Rohan Builders India Pvt. Ltd. v. Commissioner of Central Excise & Service Tax, Pune-I (2018-TIOL-3826-CESTAT-MUM) 2.31 Further, it is submitted that the allegations that the Appellant did not disclose details at the time of Audit is unfounded and baseless as the Appellant had submitted all documents sought and the department has itself stated that the information was obtained during Audit. 2.32 It is further submitted that willful suppression cannot be alleged merely because there is non-payment of Tax/ non-reporting in ST-3 returns without any evidence brought on record showing that there is suppression with intention to evade payment of Tax. In this regard reliance is placed on the case of Uniworth Textiles Ltd v. Commissioner of Central Excise, 2013 (1) TMI 616 - SUPREME COURT. 2.33 In view of the above it is submitted that extended period of limitation could not have been invoked in the instant case and therefore the demand is time-barred. For the above reasons, it is submitted that the Appeal of th....
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....,965.00 9000010150 Debit note raised by DTTIPL 2 7,16,95,000 5,09,035 7,11,85,965 7 Deloitte Touche Tohmatsu -39,95,617.00 9000010150 Debit note raised by DTTIPL 3 44,39,575 4,43,958 39,95,617 8 Deloitte Touche Tohmatsu -33,46,875.00 9000010150 Debit note raised by DTTIPL 4 33,46,875 0 33,46,875 9 Deloitte Touche Tohmatsu -4,22,73,512.00 9000010150 Debit note raised by DTTIPL 5 4,25,75,800 3,02,288 4,22,73,512 10 Deloitte Touche Tohmatsu -1,36,61,013.10 9000010150 Paid by DTT on our behalf to AFFCo Total -174,534,972.10 11 Deloitte Haskins & Sells- Mumbai -3,36,02,755.00 9000007508 Debit note raised by DHS M 6 3,36,02,755 0 3,36,02,755 12 Deloitte Haskins & Sells- Mumbai -1,31,01,102.00 9000007508 Debit note raised by....
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.... 24 Deloitte Haskins & SellsAhmd. 15,80,030.00 9000010154 Credit Note raised by DHS A Total -21,92,230.00 25 C.C.Chokshi & Co. -8,80,361.38 Op balance Mar'07 26 C.C.Chokshi & Co. -31,46,545.00 Fixed Assets Trfd. from CCC 27 C.C.Chokshi & Co. -30,00,000.00 Funds trf 28 C.C.Chokshi & Co. -15,00,000.00 Funds trf 29 C.C.Chokshi & Co. -18,00,000.00 Funds trf 30 C.C.Chokshi & Co. -10,00,000.00 Funds trf 31 C.C.Chokshi & Co. -4,00,000.00 Funds trf ....
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....om their client and Service Tax has not been discharged on these amounts, the SCN does not mention any details as to the transactions of receiving such alleged advance payments. The impugned order also does not mention about the details of the alleged advances which has escaped tax. If the department alleges that these amounts are received from clients and suppressed by the appellant, then the department had to give the date & receipt of advance, the services for which such advance received, the clients from whom such advance was received documents for payment of advance to appellant etc. There is no evidence put forth by department in this regard except for the allegation that appellant received advance payments and did not discharge Service Tax on such advances. 5.3 The appellant has explained that prior to 2011 when the Service Tax was payable on receipt basis they adopted an accounting system by which the amount to be paid by appellant to their network firms for services provided to appellant was shown as negative figures under the head 'Debtors'. This is because, the amount to be paid by network firms to the appellant was shown as debts under the head 'Debtors'. This helped a....
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....6 From the above it is clear that appellant has availed Cenvat Credit of the Service Tax collected from them by network firms. This means the net work firms have collected Service Tax from appellant and discharged their liability. The department has no dispute on the Cenvat Credit availed by appellant in this regard. So also there is no dispute that appellant has not discharged Service Tax on the payments received for providing services. The allegation is that they did not discharge Service Tax on advance payments. As already stated, there is no evidence of any transactions of receiving advance payment which has escaped payment of tax. The accounting of amount under the head negative debtors is assumed by department as advance payments. 5.7 The appellant has explained the reason for accounting under the head 'debtors' and 'negative debtors'. Though we may say that this is not a normal practice of accounting, we have to say that since all these amounts have suffered tax, there is no situation of revenue loss. The department has not been able to correctly establish the basis of demand and has raised the demand on a suspicion of the accounting done under the head Debt....