TaxTMI 
TaxTMI 
2026 (3) TMI 1531
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.... period from 2014-15 to 2016-17. It was noticed by the Revenue that the appellant had not paid Service Tax amounting to Rs.5,19,009/- (inclusive of cess) under the category of "business auxiliary service" as defined under erstwhile Section 65(19) of the Finance Act, 1994 read with erstwhile Section 65(105)(zzb) of the Finance Act, 1994. Accordingly, the said Notice proposed the demand and recovery of Service Tax to the tune of Rs.5,19,009/- from the appellant-noticee, along with interest and penalties thereon. 3. The above Notice was adjudicated by the Ld. Deputy Commissioner (P&V), Central Tax & C.X., Haldia Commissionerate, Kolkata vide the Order-in-Original No. 64/AC/Haldia-II/ADJN/2023-24 dated 01.06.2023 wherein the ld. adjudicating authority has confirmed the demand of Service Tax to the extent of Rs.4,93,426/- (inclusive of cess), along with interest. The ld. adjudicating authority also imposed a penalty equivalent to the amount of tax demanded, as above, under Section 78(1) of the Finance Act, 1994 along with a penalty of Rs.10,000/- under Section 77 of the Finance Act, 1994 read with Section 174 (2) of the Central Goods & Service Tax Act, 2017. 3.1. On appeal, the Ld....
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....thereon. 5. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 6. Heard both sides and perused the records of the case. 7. I find that the demand under dispute in this case has been raised on scrutiny of the Income Tax Returns / Form 26AS of the appellant along with the Balance Sheet and Profit & Loss Account of the appellant for the relevant period. However, I find that the Department has not conducted any independent verification before issuing the Show Cause Notice dated 20.09.2020 for raising the demand of Service Tax, as confirmed in the impugned order. I observe that the appellant was asked to submit information such as Balance Sheet, Profit & Loss Account, etc., vide letter dated 03.10.2019 by the Department, for which the appellant duly submitted the details vide his letter dated 18.10.2019. Service Tax has been demanded in the Show Cause Notice merely by scrutiny of the Balance Sheet, Profit Loss Account, ITR and Form 26AS of the appellant for the period from 2014-15 to 2016-17 (up to June, 2017). For better appreciation of the facts, the table showing the calculation adopted in the Show Cause Notice ....
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....dated 21.04.2021 was also sent seeking documents. However, without waiting for the appellant to submit any document, the impugned Show Cause Notice was issued on 28.04.2021, i.e., within a week from the letter dated 21.04.2021, solely on the basis of the data available in Form 26AS received from the Income Tax department. We find that the Revenue has not conducted any independent enquiry to ascertain the nature of services rendered, prior to issue of the Notice. 8.1. A perusal of the said Show Cause Notice clearly reveals that the demand has been raised solely on the basis of the CBDT data, without any independent verification being conducted. For the sake of ready reference, paragraph 2.5 of the said Notice, containing the details of the quantification of the demand, is reproduced below: - ...... 8.2. Thus, we agree with the submission made by the appellant that the Show Cause Notice has been issued merely on the basis of the data received from the Income Tax Department, without conducting any independent enquiry, for levy of Service Tax, which is legally not sustainable. 8.3. We find that a similar view has been taken by the Tribunal in the cas....
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....ided whether the value of such service is received or not. Thus, we find that the whole basis of show cause notice is incorrect and/or misconceived." 8.6. We find that the ratio of the above cited case-laws are squarely applicable to the facts and circumstances of the present case. Accordingly, by applying the ratio of the decisions cited supra, we hold that the demand confirmed in the impugned order, solely on the basis of the CBDT data, without conducting any independent verification to ascertain the nature of the services rendered, is not sustainable. Accordingly, we are of the opinion that the demand of Service Tax confirmed in the impugned order is liable to be set aside on this ground itself." 7.2. Thus, by applying the ratio of the decision cited supra, I am of the view that the demand raised and confirmed against the appellant in the present case, merely on the basis of comparison of the figures available in the Income Tax Returns / Form 26AS and those in the Balance Sheet and Profit & Loss Account of the appellant, is legally unsustainable. 8. Further, I find that with effect from 30.06.2012, Service Tax is leviable on all services other than the services wh....