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TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 714
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.... of the Finance Act, 1994 and Rs.2,24,73,978/- pertains to the demand of Service Tax raised under reverse charge; it is stated that they have already reversed the CENVAT Credit of Rs.1,67,768/- from their CENVAT Credit Account, prior to utilization of the same and before passing of the impugned order and hence, denial of the same is not being contested in this appeal. 3. The submissions made by the appellant in respect of the various demands confirmed vide the impugned order, inter alia are summarized as under:- 3.1. Demand of Service Tax of Rs.5,94,03,322/- [Rs.4,28,99,373/- + Rs.1,65,03,949/-]: (i) The appellant submits that Service Tax amounting to Rs.4,28,99,373/- has been confirmed on the basis of comparison of Profit & Loss Accounts, Trial Balance and Service Tax Returns. It is submitted that the Show Cause Notice has not classified as to under which taxable category Service Tax is liable to be paid by them for the period prior to 01st July, 2012 [Positive List Regime]; even for the period after 01st July, 2012 [Negative List Regime), the demand has been confirmed without analysing the nature of the activities which was necessary to determine whether such activ....
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....to 01st July, 2012 [Positive List Regime] as well as after 01st July, 2012 [Negative List Regime], the Show Cause notice has failed to analyse the nature of activities to determine whether the alleged foreign currency expenditure pertained to services falling under one of the sub-clauses of Section 65(105) of the Finance Act, 1994 and whether they would be taxable in terms of the relevant import Rules, or not. (iii) In this regard, the appellant relies on the following decisions: - * M/s Hindustan Zinc Ltd. Versus Commissioner, Central Excise, Udaipur [2021 (9) TMI 859] * N.R. Management Consultants India (P) Ltd Versus CST New Delhi And Vice-Versa [2017 (12) TMI 451 - CESTAT New Delhi] (iv) Thus, it is prayed that the demand of Service Tax of Rs.2,24,73,978/-, along with interest, confirmed in the impugned order be set aside. 3.3. Denial of CENVAT Credit of Rs.1,67,768/-: Regarding the disallowance of CENVAT Credit to the tune of Rs.1,67,768/-, the appellant has submitted that they have already reversed the disputed amount of credit and hence, are not contesting this issue. 3.4. Imposition of penalty: (i) The appellant su....
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....9,373/- [2009-10 to 2012-13]: Gross Taxable Income(Rs.)/Period 2009-10 2010-11 2011-12 2012-13 Trial Balance 20,57,61,630 41,15,68,707 45,79,78,507 46784191 8 ST - 3 Returns 4,37,34,522 26,81,42,228 39,40,77,290 42855527 5 Differential 16,20,27,108 14,34,26,479 6,39,01,217 39286943 Service Tax payable @ 10.3% &12.36% (12-13) 1,66,88,792 1,47,72,927 65,81,825 48,55,829 6.1. From the above table, we find that this demand has been raised simply on the basis of the difference between Profit & Loss Accounts, Trial Balance and S.T.-3 Returns. 6.2. For the period prior to 01st July, 2012, the charge of Service Tax under Section 66 of the Finance Act was on services falling under the various subclauses of Section 65(105). It was therefore necessary for the Department to establish that the alleged differential income pertained to rendering of taxable services falling under one of the sub-clauses of Section 65(105) of the Act. The burden is cast upon the Department to prove that Service Tax is leviable under the charging provision, which the Department has failed to do in the instant case. Hence, the demand of S....
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....iod after 01st July, 2012, Service Tax can be levied only when there is a clear identification of service provider, service rendered, service recipient and consideration paid for the same, to analyse the nature of service rendered and the liability to Service Tax on the part of the appellant thereon. Since no such exercise has been done in the Show Cause Notice, we agree with the submission made by the appellant that the demand confirmed in the impugned order cannot sustain. We observe that the same view has been expressed by the CESTAT, Chandigarh in the case of M/s. Indian Machine Tools Manufacturers Association vs The Commissioner of Central Excise, Panchkula [2023 (9) TMI 815] wherein it has been held as under: - "11. Coming to third and final issue as to whether any demand can be sustained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cann....
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....as service wise quantification was not done in that case. The relevant paragraphs of the above decision are reproduced below, for ease of reference: - "7. In respect of the quantification of amounts realized given under Page 49 of the Appeal Paper, it is seen that there is no Service Tax reference. Coming to the Annexure-III, there is reference of Cargo Handling Service and Storage warehouse service without specific service-wise quantification of Service Tax. On the other hand, we find that the Adjudicating authority in the Discussions and Findings portion of the impugned Order, has bifurcated the demand under four different categories of services and has dealt with the documentary evidence submitted in respect of these services and he has come to a conclusion to drop and confirm the demand under various categories. 8. We find that the Show Cause Notice has been issued in a very casual manner without proper quantification of Service Tax under various headings. This being so, we do not find any error with the Adjudicating Authority who has bifurcated the demand and come to conclusion. We do not find any reason to interfere with the detailed findings of the Adjudica....
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....x can be made simply based on the difference between the Balance Sheet and the ST-3 returns without providing any explanation about the nature of service on which service tax is payable. Accordingly, we hold that the demand of Service Tax of Rs.2,24,73,978/- confirmed under 'reverse charge' in the impugned order is not sustainable and hence we set aside the same. 10. Regarding the denial of CENVAT Credit to the tune of Rs.1,67,768/-, we take note of the appellant's submission that they have already reversed the credit and therefore, are not contesting the said issue. Accordingly, the denial of CENVAT Credit of Rs.1,67,768/- in the impugned order is upheld. 11. The appellant has also contested the demands confirmed on the ground of limitation. As no suppression of facts with intention to evade the tax has been established against the appellant in this case, we are of the view that the demands confirmed by invoking the extended period of limitation are not sustainable. Thus, we hold that the demands confirmed by invoking the extended period is not sustainable on the ground of limitation also. 12. As far as the issue of imposition of penalty under Section 78 of the Act an....