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TaxTMI 
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2026 (4) TMI 62
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....e Revenue had issued a Show Cause Notice [SCN] dated 21.12.2016 proposing to demand Service Tax of Rs.65,44,934/- under the head of 'Event Management Service' [EMS] alongwith interest and penalty for the period from F.Y. 2011-12 to 2015-16. Subsequently, an Order-in-Original dated 25.04.2017 was passed against the Appellant, wherein the Revenue, after allowing cum tax benefit to the Appellant, had confirmed a demand of tax of Rs.57,62,098/- along with applicable interest and penalty of Rs.57,62,098/- under Section 78 Rs.40,000/- under Section 77(1) and Rs.5,000/- under Rule 15A of CENVAT Credit Rules [CCR] The Appellant had filed an Appeal dated 04.07.2017 before the Commissioner (Appeals) Allahabad, who had passed an Order-in-Appeal No.139/ST/ALLD/2018 dated 12.03.2018 wherein the OIO was modified to the extent that the total penalty under Section 77(1) is reduced to Rs.10,000/- and penalty of Rs.5,000/- imposed under Rule 15A of CCR is set aside. The other contents of the OIO were upheld and remained unchanged. Subsequently, the Appellant filed the present Appeal before the Tribunal. Further, the Appellant had also submitted a Written Submission dated 23.04.2025 at the time of he....
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....he Adjudicating Authority in Para 6.11 of the Order-in-Original has determined that the services rendered by the Appellant fall under the category of "EMS" inasmuch as that the Appellant was engaged in the planning and organization of weddings, exhibitions, musical programs etc. and hired the services of various third-party services providers like photographers, studios etc., in the capacity of an event manager. The Appellant in the Grounds of Appeal contends that the services provided by him do not fall under the category of EMS. The arguments forwarded by the Appellant in his Written Submission dated 23.04.2025 are reproduced below: - "The Appellant respectfully submits that he just worked as a coordinator between the service recipients and service provider. As per the Circular No. 68/17/2003 dated 2811-2003, "Where the event is organized or managed by the sponsor himself, no service tax is payable under event management category". Hence, no service tax will be levied on the Appellant. There is no evidence of Appellant having rendered service of managing an event on behalf of the customer. Department has itself acknowledged in Para 4.2 of the Show cause notice t....
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....mers would be the actual taxable value. The Adjudicating Authority in Para 6.19 of OIO has rejected the Appellant's contention that the taxable value shall be confined to the commission of 8-10% received by the Appellant, by stating: - "As regards the argument of the party that they have retained only 8-10% of the payment received by them on account of office expenses, transport and other expenses and that major part of such payments received by them were paid to actual services providers. I have examined the provision of Section 67 of the Finance Act as well as CBEC Circulars and I find that the gross amount charged for rendering the services is the taxable value for the purpose of discharging service tax and no deduction is allowed for the services received for rendering the services. I also take into cognizance the fact that the party has admitted the correctness of the figures in these charts and annexure. The party has never disputed these figures even during the course of defence. None of the statements tendered by the party have been retracted. In these circumstances the statements tendered by the party are relevant for the purpose of proving the facts as per provis....
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....quivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. (3) The gross amount charged for the taxable service shall include any amount received towards the taxable service before, during or after provision of such service. (4) Subject to the provisions of sub-sections (1), (2) and (3), the value shall be determined in such manner as may be prescribed. Explanation. - For the purposes of this section, - (a) "consideration" includes - (i) any amount that is payable for the taxable services provided or to be provided; (ii) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to suc....
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....onger res integra and has been conclusively settled by Hon'ble Supreme Court in the abovementioned judgement. In view of the same, the taxable value computed in accordance with Section 67 shall be the gross amount charged by the service provider for such service provided or to be provided by him, with an emphasis on the term 'such'. In the present case, the Appellant is engaged in the provision of EMS and received a commission of 8-10% in lieu of the same. The remaining amount received by the Appellant is in lieu of payments to be made to third party service providers on behalf of the service recipient. Hence, for the concerned EMS, the gross amount charged by the Appellant is confined only to the commission of 8-10%. The remaining amount is not for the provision of EMS by Appellant and hence cannot form part of taxable value. We do not find any merit in the contention and interpretation of the Adjudicating Authority in this regard. Consequently, we observe that the Adjudicating Authority in the present case has erred in its interpretation of Section 67 of the Finance Act, 1994. As far as the OIA is concerned, we observe that the First Appellate Authority has not undertaken any dis....
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....on the basis of such documents. C.2 Hon'ble Supreme Court of India in the case of CBI vs. VC Shukla & Ors. [(1998) 1 SCR] held that - "A conspectus of the above decisions makes it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the other books and loose sheets (which we have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the correctness, still those entries would not be sufficient to charge Shri Advani and Shri Shukla with the accusations levelled against them for there is not an iota of independent evidence in support thereof." C.3 Tribunal (All) in the case of M/s Shree Radhey Radhey Ispat Pvt. Ltd. Vs. Commissioner, Central Excise, Lucknow [Excise Appeal No.50407 of 2015] held that - "25. It is a well settled law that resumption of loose slips or private records resumed from the third party, or sta....
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....t another." C.6 Hon'ble High Court in the case of Hiralal vs. Ram Rakha [A. I. R. 1953 Pepsu 113] held that - "The Rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts." C.7 Further, reliance is also placed on the following case laws which hold that demand cannot be imposed on the basis of loose papers, records seized during search. * CESTAT Delhi - Commissioner of C. Ex., Bhopal Vs. Handa Disc [2006 (3) S.T.R. 739] * CESTAT Delhi - Sky Channel Network Vs. CCE [2017-TIOL-665-CESTAT-DEL] * CESTAT Kolkata - M/s Makers Castings P. Ltd. Vs. Commissioner of CGST &C.Ex. [EA No.75409 of 2020] * CE....
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.... responsibility. We also take into account the judgements of this Bench in the two cases mentioned below, in a similar set of circumstances :- Xxxxxxx xxxxxxx xxxxxxxxx 43. On a careful reading of such case laws, we find that the burden of proof lies on the Revenue with respect to the following aspects :- - That such entries refer to cash received - That such entries are legitimate, i.e. are substantiated with other evidence - That cash has actually been received by Appellant from any of its buyers. 44. We find that it is the minimum requirement to prove the above-mentioned aspects for there to be a basis chain of events which may potentially indicate clandestine removal by Appellant. However, no evidence has been brought on record by Revenue. We note that no cross-verification has been done by the Revenue with the buyers to determine whether any cash was paid by them to the Appellant. We do not find any merit in the Adjudicating Authority's contention that since no evidence has been brought on by Appellant; such entries refer to cash received for clandestine removal. Tax payer cannot be expected to provide justification for any....
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....ence. 16.3. In the instant case we find that the investigation has not brought in any corroborative evidence to substantiate the allegation of clandestine removal. In view of the above findings, we hold that the investigation has failed to establish the alleged clandestine clearance of goods by the Appellants and hence the demands confirmed in the impugned order are not sustainable." 15. In the present case, a certificate as required in Section 65B(4) has not been brought on record by the Revenue to prove the authenticity of the concerned computer print outs. Hence, in view of the above judgement and in the absence of any corroborative evidence, we do not find any merit in the argument raised by the Adjudicating Authority. Further, we find that even if such loose papers, computer printouts etc. are considered admissible, as held by this Tribunal in various cases, it is the burden of the Revenue to establish a clear chain of causation proving the existence of alleged transactions and linking such transactions with the Appellant. We observe that the Revenue has admitted in the impugned OIO that the demand has been confirmed on the basis of the loose papers, computer print....
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....he Appellant in violation of the Cenvat Credit Rules, 2004. The Adjudicating Authority in Paras 6.23 to 6.26 of OIO has confirmed demand of such Cenvat Credit on the allegation that the same has been availed on ineligible transactions and without the relevant documents. We observe that no submissions have been made nor any reasoning provided by the Appellant in this regard either in the Appeal or in the Written Submission. The Appellant has neither pressed on the grounds nor substantiated the credit availed by producing invoices. Hence, we are inclined to uphold said demand of Cenvat Credit of Rs.31,273/- along with interest and penalty. 18. Now, we take up the issue of the admissibility and relevancy of the statements relied upon by the Revenue in the impugned Orders. The Revenue in the present case has extensively relied upon the statements of Shri Rohit Babu and Shri Abhinav Srivastava (partners of Appellant firm). The Adjudicating Authority has relied on the sole contention that the concerned loose papers, computer printout of pen drives and computer hard disk have been allegedly authenticated by the partner of the firm in their statement provided in response to summons issu....
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....statements in question are in violation of Article 20(3) of the Constitution of India, we do not find any requirement to dive further into the issue. Nonetheless, we observe that the High Court has conclusively held in the cases referred that for a statement to have evidentiary value, the person taking the statement must be authorized to administer oath and to record sworn statement, which is not the case in the present proceedings. Accordingly, we hold that the statements relied upon by the Revenue to confirm demand are unconstitutional, inadmissible and have no evidentiary value; and the demand confirmed on their basis is set aside. 20. On a perusal of the OIO as well as the impugned OIA, we find that the main contention of the Adjudicating as well as the First Appellate Authority is the alleged lack of evidence on part of the Appellant to prove the unsustainability of the demand confirmed and to prove the non-existence of clandestine transaction. Particularly in the case of impugned OIA, wherein the First Appellate Authority has passed an Order upholding demand merely on the ground that the Appellant has not brought on record evidence to disprove the contentions of the Adjudi....
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....lant is to be set aside." 21. This Bench has made a similar observation in the case of M/s Ratan Housing Development Ltd. Vs. Commissioner of Customs, Central Excise & Service Tax, Kanpur [Service Tax Appeal No.70613 of 2017]. We find no reason to deviate from the position taken by us in the above-mentioned cases. Further, with respect to the allegations of clandestine transactions based on loose papers, computer print outs etc.; in view of the case laws relied upon by the Appellant as discussed in Para 14 & 15, we find that it is trite that burden of proof in such cases shall lie upon the Revenue. Hence, we find that the burden of proving the taxability was on the Revenue and the same has not been discharged. No documentary evidence has been brought on record by the Revenue to support its allegations. In light of the same, we are of the view that the entire demand confirmed in the impugned Order based on unsubstantiated allegations by contending lack of evidence on part of Appellant is to be set aside. 22. Thus, on a thorough perusal of the impugned OIA, OIO, SCN, Appeal, Written Submission and evidences brought on record, we are of the view that the demand confirmed in impu....
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....levied or short paid or erroneously refunded because of either fraud, collusion, wilful mis-statement, suppression of fact or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a license which is not due to any fraud, collusion or willful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation." M/S. Uniworth Textiles Ltd. vs. Commnr. Of Central Excise, Raipur [2013 (9) SCC 753]-[2013-TIOL-13-SC-CUS]-[2013-(288)-E.L.T. 161 (S.C.)] "Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that "the Appellants had not brought anything on record" to prove their claim of bona fide conduct, on the Appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India Vs. Ashok Kumar & Ors. that "it cannot be overlooked that burden of establishing mala fides is very heavy on the per....