TaxTMI 
TaxTMI 
2025 (10) TMI 736
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....SDRPL) existed only on papers. It generated bogus invoices which could help interested business entities managing their Service Tax liability and/or books of accounts. The company has no establishment at the addresses declared to the various Government authorities. Also they have no staff, no expertise or no infrastructure even to run an office. 2.1. The company issued two sets of invoices - one set of invoices where the copies were kept with the Respondent and they did not record charging of Service Tax in the said invoices and the other set of invoices the copies of which were sent to the clients wherein the Respondent recorded charging of Service Тах. It is alleged that the Respondents are liable to pay the Service Tax collected by them from the customers as per the provisions of Section 73A of the said Act. Accordingly, the Revenue was of the view that the Respondent was liable to pay Service Tax of Rs. 18,05,51,745/- collected and not deposited in the government account. Admittedly, the Respondent had paid Service Tax amounting to Rs.1,53,40,510/- during the material period in respect of the services rendered by them. 2.2. It has also been alleged that ....
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.... Rs.18,05,51,745/− as demanded in the SCN. Thus, the Adjudicating Authority in actual dropped the entire demand of Rs.18,05,51,745/−. (ii) The Adjudicating authority in para 10.7.3 of the O-I-O has acknowledged that the amount of Rs.1,53,40,510/− has been received and paid to the government exchequer as Service Tax by the Respondent as per the ST-3 returns but simultaneously has not acknowledged the CENVAT Credit amounting to Rs. 90,32,108/- utilized towards payment of Service Tax and shown in the same ST-3 returns of the Respondent. Thus, the Adjudicating Authority made an error by not acknowledging Rs. 90,32,108/− as an admitted Service Tax liability of the Respondent as the same has been reflected in their ST-3 returns. (iii) The Adjudicating authority in para 10.6.1 of the O-I-O has observed that data in respect of details of invoices found at the end of the clients of SDRPL and details of invoices found at the end of SDRPL as detailed in Table B of SCN is not matching but failed to appreciate and discuss the comparative chart as mentioned in para 2.16 of the SCN which clearly indicates that the invoice/bills were fabricated by the SDRP....
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....nt has raised bills for providing service and on that basis the recipients have taken credit. All the payments have been received through cheque and recorded in particular ledger. This fact has been ignored by the adjudicating authority. (vii) Bills issued for rendering same services cannot be assumed as bogus or genuine merely on the basis of non-mentioning or mentioning Service Tax amount therein. (viii) As regards the quantification of demand based on Balance sheet figure it is mentioned that the Respondent is purely service provider and they have issued Service Tax invoice. Therefore their entire income/revenue is from service. Thus, the figure mentioned in the Balance Sheet has been considered for demand. This fact has been ignored by the adjudicating authority. (ix) The Adjudicating Authority failed to appreciate the fact that the Respondent throughout the material period issued the invoices where under the services were provided by them & they also paid the service tax and further they also received the payment by way cheques from their clients for service provided by them but the recipients have not produced any such documents/cash voucher/Audited....
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.... further submits that the same principle has been applied for the bills/challans against which various companies enjoyed CENVAT credit because the investigation could not recover any invoice from the Respondent end. Thus, the allegation of raising two sets of invoices fails here as well. Moreover, it was held that from the analysis of the 'proofs' relied upon in the Show Cause Notice it can be observed that the principle of quantification of demand has been erroneous and only if it is proved that all the bills/challans showing charging of Service Tax were issued by the Respondent and the amount of Service Tax involved therein have been collected by them, the Service Tax so collected could have been recovered with the application of Section 73A of the said Act. (iv) It is submitted that it is an admitted fact that the entire transaction was a sham transaction and the Respondent was accommodating entries for various clients against commission charges. Further, it is an admitted fact that the Respondent in some cases had issued invoices and charged service tax which was duly disclosed in the ST-3 return and tax was also paid in cash. The same thing was observed by the....
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....burden of some incriminating documents recovered from the premises of others which are uncorroborated. (vii) The Respondent submits that on account of incomplete and faulty investigation without verifying the contention of the Respondent and in absence of corroborative evidence substantiating issuance of tax invoice and receipt of service tax from the Client, the Learned Adjudicating Authority after a detailed discussion and finding dropped the demand against the Respondent. (viii) Moreover, with respect to recovery of tax pertaining to fake invoice cases (issuance of tax invoice without actual supply of goods or services or both), the Central Board of Indirect Taxes and Customs vide Circular No. 171/03/2022-GST dated 06.07.2022 clarified that no tax demand and recovery can be made from the person who issued the fake invoices. In such cases, recovery is to be effected from the ultimate client who actually used the irregular credit. In the present case, the Respondent has submitted that the department has initiated action by writing to Chief Commissioners of 16 Zones where the clients who received such fake invoices are located. This is evident from the findings of....
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....has not brought in any further evidence to show that the Respondent has actually collected more Service Tax than what was disclosed in the ST3 returns filed by them. We also observe that the Revenue has claimed that the Respondent has issued two set of invoices one with Service Tax and the other without Service Tax. However, we find that the investigation has not brought in any evidence to substantiate this allegation. Thus, we hold that any demand over above what has been paid by the Respondent is not sustainable. 6.2. In the present case, the provision of Section 73A(2) of the Finance Act has been invoked to demand Service Tax from the Respondent. The said section reads, "where any person who has collected any amount which is not required to be collected from any other person, in any manner representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government". From a plain reading of the said sub-section, it clearly transpires that for raising demand on the basis of the said sub-section, it requires to be proved that the Respondent has collected an amount representing Service Tax on the basis of documents viz. invoices/chall....
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....on 7 of the CGST Act. As there is no supply by 'A' to 'B' in respect of such tax invoice in terms of the provisions of section 7 of CGST Act, no tax liability arises against 'A' for the said transaction, and accordingly, no demand and recovery is required to be made against 'A' under the provisions of section 73 or section 74 of CGST Act in respect of the same. Besides, no penal action under the provisions of section 73 or section 74 is required to be taken against 'A' in respect of the said transaction. The registered person 'A' shall, however, be liable for penal action under section 122(1)(ii) of the CGST Act for issuing tax invoices without actual supply of goods or services or both. A registered person "A" has issued tax invoice to another registered person "B" without any underlying supply of goods or services or both. 'B' avails input tax credit on the basis of the said tax invoice. B further issues invoice along with underlying supply of goods or services or both to his buyers and utilizes ITC availed on the basis of the above mentioned invoices issued by 'A', for payment of his tax liability in respect of his said outward supplies. Whether 'B' will be li....
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....unt from his customers as duty in respect of certain goods sold by him and that amount collected as duty has not been paid to the Government. In this matter, the case against MGM Tools Pvt. Ltd. is that they have issued bogus invoices for 3% commission without supply any goods just to enable his customer M/s. Polymermann Asia Pvt. Ltd., Nasik avail Cenvat Credit and this fact is confirmed not only by the statement of the Directors of the appellant company Sh. S.N. Godia and Sh. Dilip Mehta, but also by the evidence of the transporters. When no goods have been supplied against the invoices issued to M/s. Polymermann Asia Pvt. Ltd. and except for 3% commission, the appellant have not received any thing, there is no question of the appellant having received any amount towards duty which was not paid by them to the Government. Just because the invoices were issued by the appellant to M/s. Polymermann Asia Pvt. Ltd. showing sales of duty paid capital goods, it cannot be presumed that they had received the payment against those invoices when the evidence on record shows otherwise. In view of this so far as the demand under section 11D is concerned, the order of the Commissioner (Appeals)....