TaxTMI 
TaxTMI 
2026 (1) TMI 1074
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....ad, Kolkata - 700 107, wherein the ld. adjudicating authority has inter alia confirmed the demand of Service Tax of Rs.17,54,035/-, along with interest and imposed a penalty of Rs.25,83,786/- under Section 78 of the Finance Act, 1994 read with Rule 15 of the CENVAT Credit Rules, 2004. 1.1. Service Tax Appeal No. 76597 of 2017, has been filed by the Revenue against the same Order-in-Original bearing No. 07/PR.COMMR/ST-I/KOL/2017-18, dated 28.04.2017, to the extent wherein the Ld. Principal Commissioner, Service Tax-I Commissionerate, has dropped the demand of Service Tax of Rs. 90,47,708/-, along with interest and penalty thereon. 1.2. As both these appeals emanate from the same Order-in-Original, both are taken up together for decision by a common order. 2. The issue in brief is that in course of the Service Tax Audit of the accounts of the assessee-appellant, the reconciliation of the income as per Balance Sheet and taxable value of service shown in the ST-3 returns pertaining to the period 2009-10 to 2013-14 was carried out by the audit officers. On reconciliation, it was found that the assessee/company had short paid Service Tax amounting to Rs.1,76,81,726/- (including ....
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....Rs. 1,58,34,971/- is payable on the differential value of taxable service of Rs.5,77,97,151/- Rs.9,19,41,022/- and Rs.33,32,837/- during the financial years 2009-10, 2010-11, & 2012-13 respectively; that further on scrutiny of Balance Sheet and ST-3 Returns for the period 2013-14, it was also observed that the differential amount of Service Tax to the tune of Rs.7,45,979/- is payable on value of taxable services of Rs.60,35,426/- only. The assessee-appellant submits that from the allegation it is apparent that the impugned SCN has attempted to levy Service Tax on income whereas the law imposes tax on provision of service; that the impugned SCN has simply taken the difference between ST-3 Return and balance sheet and prepared a table without offering any explanation or basis as to how the demand had arisen for different periods and services. They contend that the demand of service tax has been calculated in the impugned order without doing any investigation or analysis of relevant documents. The assessee states that it is a settled position of law that no demand of Service Tax can be made simply based on the difference between the Balance Sheet and the ST 3 returns without providing....
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.... meaning of the preceding words and it is by way of extension, and not with restriction. Thus, the said appellant contends that even after deletion of expression "activities relating to business" in the definition of input service in Notification No 3/2011 - CE (NT), dated 01.03.2011 (w.e.f. 01.04.2011), the 'means' portion available in the definition covers all such services used for providing output services of the appellant; they further state that in the present case, they have availed CENVAT Credit of input tax paid on various services which inter alia includes convention service, general insurance services, insurance service and business support services, which were all used in relation to proving output services and hence they are eligible for the CENVAT Credit availed on all such input services. 7. Regarding the penalty of Rs.25,83,786/- (Rs.15,80,135 +Rs.10,03,651) imposed under Section 78 of the Finance Act, 1994 and under Rule 15 of the CENVAT Credit Rules, 2004, the assessee-appellant has submitted that considering the fact that they had already agreed to the liability and paid the said Service Tax, amounting to Rs.9,26,876/- and Rs.1,73,900/-, along with app....
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....t and Loss Account. The various sources of income of the assessee includes sale of goods; sale of services (domestic and export); Interest on deposits with Banks and others; Dividend from Investment; Profit on sale of investments etc. We also note that apart from the aforesaid incomes, some 'other incomes' are also reported in the Profit and Loss Account like, Provision for doubtful debts no longer required written back, provision no longer required written back, provision for diminution in value of investments no longer required, etc. We find that all these incomes are not generated from rendering of any taxable services. We find that the ld. adjudicating authority, in the impugned order, has construed the difference between the amount shown in the balance sheet and the ST-3 returns as a taxable amount without giving any reason for coming to such conclusion. If the Department wants to demand Service Tax on this amount, then the onus lies on the Department to establish that these amounts have been received towards rendering of taxable service, which has not been done in this case. It is a settled position of law that no demand of Service Tax can be made simply based on the basis of....
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....ing in the conference & seminar organised by various Chamber of Commerce and Industry Bodies like Indian Chamber of Commerce and NASSCOM, etc. We find that the CENVAT Credit has been denied on the ground that the amendment brought in the definition of 'input service' w.e.f. 01.04.2011 vide Notification No. 3/2011-CE (NT), dated 01.03.2011 has deleted the words "activities relating to business" in the inclusive part of the said definition. Thus, the Ld. adjudicating authority took the view that the said services were not covered within the definition of "input service". 14.1. We find that the term 'input service' has been defined under Rule 2(l) of the CENVAT Credit Rules, 2004. The extract of the definition is given below: - "input service" means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or a....
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....dit, the question of demanding interest or imposing penalty does not arise and hence we set aside the same. 15. Regarding the appeal filed by the Revenue, we find that the Department has appealed against dropping the demand of Rs.90,47,708/-, along with penalty, and non-imposition of penalty to the extent of Rs.11,00,776/- by the ld. adjudicating authority. We observe that the said demand had been raised in the impugned Show Cause Notice simply by comparing the audited profit & loss account and the corresponding years' service tax return (ST-3) without analysing the nature of service to determine whether a taxable service liable to service tax has been rendered or not. From a perusal of the impugned order, it can be observed that the ld. adjudicating authority has dropped the demand based on the explanation and Chartered Accountant's certificate provided by the Appellant. We find that the Ld. adjudicating authority has given a categorical finding for dropping the said demands. 15.1. Therefore, we fully agree with the findings and do not find any reason for differ with the same. Accordingly, we uphold the dropping of the demands in the impugned order and reject the appeal file....