TaxTMI 
TaxTMI 
2025 (10) TMI 264
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....lf with the jurisdictional Service Tax authorities vide Service Registration No. AKTPK4225GSD001. On the basis of third-party data received from the Income Tax Department reflecting therein the value of turnover as declared in Income Tax returns filed by the appellant during the period 2015-16 and the taxable value of services declared in the ST-3 returns filed with the Service Tax Department, an enquiry was conducted on the difference in the value of services shown in these two records. Based on such differences in the gross value provided, the Department came to the conclusion that the appellant had failed to discharge the service tax liability of Rs.3,69,781/- on the differential value of services arrived at by them at Rs.25,50,214/- relating to the period April, 2015 to March, 2016. Accordingly, Show Cause Notice (SCN) No. 60/2020-21 dated 29.12.2020 was issued demanding service tax of Rs.3,69,781/- along with interest and seeking for imposition of late fees, penalties on the appellants under Sections 70, 77 and 78 of the Finance Act, 1994. 2.3 The issue was adjudicated by the jurisdictional Assistant Commissioner, CGST & Central Excise, Division-I, Bhiwandi Comm....
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....d by him under the Finance Act, 1994 or not; and the demand of short payment of service tax in the impugned order is sustainable? (ii) whether penalty under Section 78(1) of the Finance Act, 1994 is imposable on the appellants; and in the facts and circumstances of the case, whether the impugned order imposing such a penalty is legally sustainable or not? 4.1 From the facts on record it is evident that the learned Commissioner (Appeals) had given an opportunity of personal hearing to the appellant, and the submissions made before the said authority was also taken into account. After going through the facts of the case, records placed before him and submissions made by the appellants during the personal hearing, learned Commissioner (Appeals) had given the following findings. The following are some of these findings relevant to the issues in dispute. "10. Keeping various submissions and facts submitted by the Appellants, before me, I find that the Appellant in the foregoing paras has submitted that New India Assurance Company (herein after referred to as NIACL) has deducted income tax on final invoice value i.e. professional fees+ Expenses + Service ....
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....l, the appellant had produced the details of service tax payments made subsequent to the demands raised by the SCN with the copy of e-Receipt of Service Tax payment made by him, as follows: Sr. No. Challan Identification No. (CIN) Date Amount (Rs.) 1 20220527100134376452 27.05.2023 27,734 2 20230802150350256143 02.08.2023 6,005 3 20230922153147759254 22.09.2023 1,50,000 4 2044354543 17.06.2025 1,50,000 Total 3,33,739 Further, the appellant had also paid the pre-deposit amount of Rs.27,734/- as required under Section 35F of the Central Excise Act, 1944 as made applicable to matters relating to service tax under Section 83 of the Finance Act, 1994. Therefore, it is evidential that the entire amount of tax liability as re-determined by the learned Commissioner (Appeals) have been paid by the appellant in the above manner. 4.3 As regards the issue of imposition of penalty on the appellant is concerned, in order to appreciate the correct legal position, the relevant legal provisions of the Finance Act, 1994 is extracted and herein given below for ease of reference: - "SECTION 78. Penalty....
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....y of the provision of Service Tax statute, then such a person is liable to pay service tax arising on account of such occasions and is also liable to a penalty, which is equal to the amount of service tax so evaded. In this regard, I find that entire proceedings were initiated on the basis of details submitted by the appellant before the Income Tax Department and the Service Tax authorities. Further, it is not the case of the Department that the appellant had though issued the cheque, payment to the tax consultant towards service tax liability, it is because of his fraudulent action that the service tax was not paid to the government exchequer. Further, the appellant had also filed the periodic ST-3 returns. In fact, on careful examination of the order passed by the original authority and the learned Commissioner (Appeals), it reveals that on the basis of the details submitted by the appellant, the actual tax payable in respect of taxable services were redetermined by the learned Commissioner (Appeals) and the e-Receipt given by the department evidence the fact that the entire service tax liability has been properly paid by the appellant. 5.1 On further examination of the ....
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....d, adjudicating authorities are expected to pass a judicious order after proper appreciation of facts and submission of the noticee." I find that though the SCN was issued in the present case prior to the issue of the above instructions dated 26.10.2021, the crux of the above instructions squarely apply to the present case. Firstly, the original authority did not take into account the various details already submitted by the appellant and these were considered only by the learned Commissioner (Appeals) who redetermined the tax liability accordingly, which was also paid by the appellant. Therefore, the aforesaid instructions of the CBIC that firstly the SCN should be issued after proper verification of the facts, and if this has not been done then the adjudicating authorities are expected to pass a judicious order after proper appreciation of the facts and details submitted by the appellants, squarely applies to this case. 6.1 In the impugned order, the adjudicating authority had confirmed the demands proposed in the SCN by invoking extended period of limitation, on the ground that the appellant have willfully suppressing the facts from the department with the intent to evade ....