TaxTMI 
TaxTMI 
2026 (3) TMI 912
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....ome Tax Department reflecting receipts under the head "Sale of Services" in Form 26AS statement for F.Y. 2016-17. 4. On the basis of such Income Tax data, a Show Cause Notice [SCN] dated 22.10.2021 was issued proposing to demand Service Tax amounting to Rs.86,23,306/- under Section 73(1) read with Sections 66B and 68 of the Finance Act, 1994 along with interest under Section 75 of the Act and for imposition of penalties under Sections 77 and 78 and recovery under Section 73A of the Finance Act, 1994. 5. The SCN was adjudicated ex-parte against the Appellant confirming the demand of service tax along with interest and imposing equal penalty under Section 78 and other penalties as proposed in SCN by invoking extended period of limitation. 6. Being aggrieved by the said Order-in-Original, the Appellant preferred an appeal before the Commissioner (Appeals). However, the learned Commissioner (Appeals) also disposed of the appeal ex-parte and upheld the Order-in-Original vide Order-in-Appeal dated 17.05.2023 without properly appreciating the facts, submissions and the legal position involved in the matter. 7. Aggrieved thereby, the Appellant has preferred the present appeal b....
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....tion 66D of the Finance Act, 1994 (Negative List), and therefore is not liable to Service Tax. 12. It was further argued that no specific taxable service has been identified or classified by the Department in the SCN or in the impugned orders. 13. The Ld. Counsel for the Appellant further submitted that mandatory pre-SCN consultation, as prescribed under Departmental Circulars for demands exceeding Rs.50 lakhs, was not conducted. Lastly, it is submitted that penalties under Sections 77 and 78 are wholly unsustainable in absence of misstatements, suppression of facts etc. with an intention to evade payment of Service Tax. 14. The Ld. Counsel for the Appellant has also submitted written submissions wherein he submitted that the amount received from Shri Sanjay Minotra were also related to the trading activity. An Affidavit sworn by the Appellant alongwith copies of the documents evidencing their contention were submitted during the course of hearing. 15. Shri Santosh Kumar Ld. Departmental Authorized Representative justified the impugned order and prayed that the appeal filed by the Appellant, being devoid of any merits, may be dismissed. 16. Heard both the sides and p....
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....ent. We find that there was no evidence of suppression of facts on the part of the Appellant and as such larger period of limitation is not invokable. The Appellant was regularly filling ST-3 Returns and all the facts were in the knowledge of the Department. 20. We also find that the entire demand has been initiated on the basis of third party information received from the Income Tax Department. We also note that no other record of the Appellant was taken into consideration for demanding the Service Tax amounting to Rs.86,23,306/- for the period 201617. The Appellant has agitated that it is the consistent view of the higher courts that demands on the basis of third party information are not sustainable. A similar issue had come up for consideration in the case of M/s Sharma Fabricators & Erectors Pvt. Ltd. Vs. C.C.E., Allahabad reported as 2017 (5) G.S.T.L. 96 (Tri.-All.) wherein it was held as under:- "3. Heard the ld. Counsel for M/s. Sharma he has basically argued that the said Show Cause Notices were not issued by examining the books of account maintained by M/s. Sharma. The Show Cause Notices were based on the presumptions and third party information. He has argued....
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....orth mentioning here that the purpose of audit report is to point out any discrepancy to the notice for examination by the executive and it is the duty of executive to examine the records and examine the objection raised with reference to the records and facts of the case and take a view whether there is a sustainable case for issue of Show Cause Notice. Such vital aspects of framing of charges have been missing in the present case. The charges in the Show Cause Notice have to be on the basis of books of account and records maintained by the assessee and other admissible evidence. The books of account maintained by M/s. Sharma were not looked into for issue of above stated two Show Cause Notices. Therefore, the transactions recorded in the books of account cannot be held to be contrary to the facts. Therefore, we hold that the said Show Cause Notices are not sustainable. Since the said Show Cause Notices are not sustainable, appeal bearing No. ST/890/2010 filed by M/s. Sharma is allowed and appeal bearing No. ST/949/2010 filed by Revenue is dismissed. Miscellaneous Applications also stand disposed of. Cross Objection also disposed of." 21. We find that the decision of the Tribun....