TaxTMI 
TaxTMI 
2026 (4) TMI 304
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....SLG-ST/2023-24 dated 09.01.2024 wherein the Ld. Commissioner (Appeals) has upheld the demand of Service Tax confirmed against the appellant in the Order-in-Original No. 15/Assistant Commissioner/CGST/DJ-Divn/22-23 dated 3.06.2022 to the extent of Rs.1,28,844/- (inclusive of cess), along with interest and penalty thereon. 2. The facts of the case are that on scrutiny of third party information received from the Income Tax Department as reflected in ITR/Form 26AS and on comparison of the same with the gross value declared in the ST-3 Returns filed by the appellant, for the Financial Year 2015-16, it was found that there was a short payment of Service Tax to the extent of Rs.1,28,844/- (inclusive of cess) on the net taxable value of Rs.8,88....
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....he advances in the previous year and paid Service Tax as and when the advances were received in terms of the Point of Taxation Rules, 2011; however, as per the requirement of the accounting practices, they were carrying forward the advances and shown the same in Schedule-B to the Balance Sheet. It is stated by the him that the Department has considered this amount of advance(s) carried forward by them, received in the previous year, as receipt for that particular year and demanded Service Tax from the appellant. In this regard, it has been pointed out that the appellant have also furnished a Reconciliation Statement of "ITR vis-à-vis ST-3 Return" which is also available in paragraph 3.3 of the impugned order dated 09.01.2024; however....
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....lant during the Financial Year 2015-16 for the purpose of levying Service Tax. 9. I have perused the Reconciliation Statement given by the appellant, which is also available in paragraph 3.3 of the impugned order; the same has also been acknowledged by the ld. adjudicating authority at paragraph 6 of the Order-in-Original dated 23.06.2022. For the sake of ready reference, the same is scanned and reproduced below: - Reconciliation of ITR vis-à-vis ST-3 Return Financial Year:2015-16 Amount (Rs) Total Sales of Service (as per ITR-5) 1,25,88,581.65 Add: Advance c/f as on 31.03.2016 41,13,820.25 Less: Advance b/f as on 01.04.2015 73,59,444.31 Receipts inclusive of taxes 93,42,957.59 Value as per ST-3....
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....ture of service rendered during the concerned period. The relevant portion of the said Order is reproduced below: - "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 the services rendered by the appellant and its Service Tax liability. Evidences available on record indicate that an e-mail dated 16.04.2021 was sent to the appellant seeking some documents. Subsequently, another later dated 21.04.2021 was also sent seeking documents. However, without waiting for the appellant to submit any document, the impugned Show Cause Notic....
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....of any independent or corroborative evidence from the Service Tax records. Such mechanical reliance on Income Tax data, without verification of the nature of receipts or proof of taxable services rendered, is impermissible in law. It is a settled legal position 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....
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....rdingly, 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." 10. Thus, by applying the ratio of the decision cited supra, in the absence of any independent verification or corroborative evidence thereof for raising the demand of Service Tax, I hold that the demand confirmed against the appellant in the present case, merely on the basis of difference in the figures available in the In....