TaxTMI 
TaxTMI 
2026 (1) TMI 1015
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....ee of Rs.80,000/- on account of non-filing of ST-3 Returns under Section 70 of the Act read with Rule 7(C) of the Service Tax Rules, 1994 have also been imposed. 2. The facts of the case are that M/s. Nanu Shome & Co. (hereinafter referred to as the "appellant"), is a firm engaged in the business of providing works contract services relating to construction of civil structures, construction of road, river embankment, canal for irrigation related works, etc., to various local authorities and government bodies. The appellant firm had Mr. Sandeep Shome and Mrs. Nanu Shome as partners. After the death of Mr. Sandeep Shome on 23.04.2023, his wife, Mrs. Nanu Shome, became the sole owner of the firm. As per the appellant, the said firm stopped functioning after the death of Mr. Sandeep Shome. 2.1. As per the appellant, they were under the bona fide belief that the services provided by them were exempted from levy of Service Tax by virtue of Notification No. 25/2012-S.T. dated 20.06.2012 as amended by Notification No. 09/2016-S.T. dated 01.03.2016. Therefore, the appellant did not take registration with the Department and did not file any Service Tax Returns, since they were of the v....
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....lely on the basis of data received from CBDT [i.e. 26AS data], without adducing any corroborative evidence or without conducting any independent enquiry therefor, which is arbitrary and untenable. Thus, the appellant submits that the demand confirmed on the basis of unverified data from the Income tax Department is not sustainable. In support of this contention, the appellant relies on the following judicial pronouncements: - i. M/s. Tabassum Enterprises v Commissioner of CGST&CX [Final Order No. 77452/2025 dated 19.09.2025] ii. M/s. Rishu Enterprise v. Commissioner of C.G.S.T. & C.Ex., Dibrugarh [Service Tax Appeal No.75509 of 2022 - CESTAT, Kolkata]. iii. M/s. Quest Engineers & Consultant Pvt. Ltd. v. Commissioner of C.G.S.T. & C.Ex., Allahabad [2022 (58) G.S.T.L. 345 (Tri-All)] iv. M/s. Gopi Chenna v. Commissioner of Central Tax, Medchal - GST [Final Order No. A/3007830079/2024 dated 26.02.2024 in Service Tax Appeal No. 30412 of 2023 & anr. - CESTAT, Hyderabad] v. M/s. Indian Machine Tools Manufacturers Association v. The Commissioner of C.Ex., Panchkula [Final Order No. 60403 of 2023 dated 18.09.2023 in Service Tax Appeal No. 4174 of....
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....1, being oppressive in nature would be applicable prospectively, i.e., from 11.11.2021 only, as held by the Hon'ble Apex Court in the case of Suchitra Components v Commissioner of C. Ex., Guntur [2007 (208) E.L.T. 321 (S.C.)]. 5.2.2. As the mandatory requirement of pre-Show Cause Notice consultation has not been followed in this case, it is the appellant's contention that the proceedings culminating from the Show Cause Notice in question are unsustainable. 5.3. In view of the above submissions, the Ld. Counsel for the appellant prays for setting aside the impugned demand confirmed vide the Order-in-Original dated 28.03.2024, along with interest and penalties thereon. 6. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. Accordingly, he prayed for rejection of the instant appeal filed by the appellant. 7. Heard both sides and perused the case records. 8. We find that in the present case, the Revenue has issued the Show Cause Notice demanding Service Tax on the basis of the data received from the Income Tax department. We find that the Revenue has not conducted any independent verification of the nature of....
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....ition that mere entries in income tax returns or Form 26AS cannot, by themselves, establish liability under the Finance Act, 1994, unless corroborated by demonstrating rendition of taxable service." 8.4. The said issue has been examined by the Tribunal in the case of M/s. Rishu Enterprise v. Commissioner of C.G.S.T. & C.Ex., Dibrugarh [Service Tax Appeal No.75509 of 2022 - CESTAT, Kolkata] wherein it has been held as follows: - "8. In view of the judicial pronouncement of this Tribunal, we hold that merely on the basis of Form 26-AS issued by the Income Tax Department, the demand of Service Tax is not sustainable against the appellant. ..... 11. In view of this, we hold that the impugned demand is not sustainable against the appellant on the basis of the details provided by the Income Tax Department in Form 26AS and the extended period of limitation is not invokable." 8.5. Further, the same issue has also been dealt with by this Tribunal in the case of M/s. Quest Engineers & Consultant Pvt. Ltd. v. Commissioner of C.G.S.T. & C.Ex., Allahabad [2022 (58) G.S.T.L. 345 (Tri-All)]. The relevant observation of the Tribunal in the aforesaid case is reprodu....
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.... Executive Engineer, Alipurduar Division, P W Directorate (vii) Office of the Executive Engineer, Cooch Behar Highway Division (viii) West Bengal State Rural Development Agency (WBSRDA), Purba Medinipur Division (ix) West Bengal State Rural Development Agency (WBSRDA), Siliguri (x) West Bengal State Rural Development Agency (WBSRDA), Uttar Dinajpur 9.1. The above receipts of money indicate that the appellant has received the said amounts from government bodies or local authorities, as the case may be. In fact, we find that the Show Cause Notice has been issued on the basis of the above said data received from the Income Tax Department. However, neither the Show Cause Notice nor the Order-in-Original has brought in any evidence to substantiate the allegation that the appellant has rendered services to any other person for which the exemption claimed by the appellant is not applicable. From the impugned order, we find that the Ld. adjudicating authority has given the finding that the works rendered by the appellant are related to construction of civil structures and other original works in relation to road and irrigation related work, to governm....
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....te of issuance of the said Circular was much after the date of issuance of the instant Show Cause Notice, which came to be issued on 28.04.2021. On this score, we also agree with the submission of the appellant that oppressive circulars would be applicable prospectively and thus the said Circular dated 11.11.2021, being oppressive in nature, would be applicable prospectively, i.e., from 11.11.2021, in terms of the ruling of the Hon'ble Apex Court in the case of Suchitra Components v Commissioner of C. Ex., Guntur [2007 (208) E.L.T. 321 (S.C.)]. 10.2. We find that the above issue has been examined in detail by this Tribunal in the case of M/s. SIS Limited v Pr. Commissioner of C.G.S.T. and Central Excise [Final Order No. 77549 of 2025 dated 15.10.2025 in Service Tax Appeal No. 75555 of 2024 - CESTAT, Kolkata]. The relevant observations of the Bench in the said decision are reproduced below: - "7. The relevant portions of the Circulars are extracted below: Circular No. 1053/02/2017-CX dated 10th March 2017 5.0 Consultation with the noticee before issue of Show Cause Notice: Board has made pre show cause notice consultation by the Principal Commissioner/ ....
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....se Notice demanding Rs.6.79 crores for the extended period. Out this demand, the Adjudicating authority has dropped the demand to the extent of Rs.6.45 crores [about 95% of the demand]. The Revenue is not aggrieved by the same and no appeal has been filed. Therefore, we take the view that no proper investigation was made while issuing the Show Cause Notice for the extended period. It is also on record that the data has been obtained from the ST 3 Returns and the Balance Sheets of the appellant. This also fortifies the view that there was no case of suppression has been made out against the appellant, in the first place. Viewing this from another angle, it is more in the nature of a demand for the normal period only, which in any case, required pre-consultancy procedure to be followed, which has not been done in this case. 11. Coming to the case law cited by the appellant, we find that the Hon'ble Gujrat High Court in the case of Jay Mahakali Industrial Service Versus Union of India [(2025) 29 Centax 353 (Guj.)], has considered the issue in a very detailed way and interpreted various decisions of the High Courts and held as under: - "12.1 The aforesaid Circular cam....
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.... 13. In the present case, as is evident from the impugned SCN, the alleged non-payment of service tax pertains to period between 2012- 2013 to 2016-2017. Consequently, there is no 'preventive' aspect involved in the SCN and this is not even disputed by learned counsel for the Respondent. However, what is urged before the Court by the Respondent is that since the SCN was preceded by a search that was conducted in the business premises of the Petitioner, and the Petitioner also rendered itself liable for penal action 'for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax' and other incidental levies, the SCN partakes of the character of an 'offence related' SCN and therefore falls within the exceptions carved out under para 5.0 of the Master Circular. 14. The above submission runs contrary to the very object of para 5.0 C/SCA/11308/2019 JUDGMENT DATED: 03/02/2022 which is to narrow down the scope of the dispute by engaging the Assessee on specific areas where the Respondent may require information/clarification from the Assessee regarding alleged evasion of service tax. In t....