TaxTMI 
TaxTMI 
2026 (4) TMI 1079
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....y confirmed a demand of Rs.43,63,250/- with interest and imposed an equal penalty under Section 78 and a penalty of Rs.5,000/- under Section 77 of the Finance Act, 1994. The appeal filed before the Commissioner (Appeals) was rejected, leading to the present appeal. 3. The learned Advocate Shri V.Ravindran appeared for the appellant and Ld. Authorized Representative Shri M. Selvakumar appeared for the respondent. 3.1 Shri V. Ravindran the Ld. Counsel for the appellant submitted as follows:- A. The impugned demand has been raised merely on the basis of credits reflected in the appellant's bank statements, without any analysis of the nature of transactions, their classification, taxability, or eligibility for exemption. Such an approach is alien to the scheme of the Finance Act, 1994 and contrary to settled law. B. The bank credits included several non-taxable and exempt receipts, inter alia: (a) Consideration received during 2011 for construction of a residential complex comprising only six dwelling units, which did not fall within the definition of "Construction of Complex Service" during the relevant period (prior to 01.07.2012). (b) A sum ....
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....) Cadilla Laboratories v. CCE - 2003 (152) E.L.T. 262 (c) Uniworth Textiles v. CCE - 2013 (288) E.LT. 161 d) Batra Motors & Travels Vs CCE., Delhi-III - 2013 (30) S.T.R. 478 (Tri. - Del) e) Commr. of Service Tax, Ahmedabad Vs Purni Ads. Pvt. Ltd. - 2010 (19) S.T.R. 242 (Tri. Ahmd) F. The demand proceeds on a flawed "best judgment assessment" by taxing all bank receipts due to alleged non-availability of data prior to 2009, without calling for further information. This is contrary to Section 72, which mandates consideration of all relevant material. G. It is well settled that best judgment assessment cannot determine the very nature of the taxable service or the taxable event by guesswork, as held in Shubham Electricals v. CST & ST, Rohtak [2015 (6) TMI 786]. H. The burden to establish taxability lies squarely on the department and cannot be shifted to the appellant merely by alleging non-submission of evidence. He placed reliance on the following judgments: a) Hindustan Ferodo Vs CCE b) Uol Vs Garware Nylons [1996 (9) TMI 193 Supreme Court] c) CCE Vs Urmin Products P. Ltd [2023 (10) TMI 1112 Supreme Co....
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....ated 01.03.2006 and 40/2010-ST dated 28.06.2010, resulting in tax demand of Rs.45,83,155/-(Service Tax: Rs.44,49,665/-, Education Cess: Rs.88,993/-, SHE Cess: Rs.44,497/-). J. The assessee's conduct clearly establishes suppression of facts and intent to evade tax; the full extent of liability surfaced only through departmental investigation. K. The assessee failed to substantiate SCN replies even during personal hearing. L. Invocation of the extended period under Section 73(1) is justified, with liability to service tax, interest under Section 75, and penalties under Sections 76, 77, and 78. He prayed that the appeal may be rejected. 4. We have heard both parties and examined the records. The dispute centers on the valuation of services rendered by the appellant. The Revenue alleged non-cooperation and suppression of facts by the appellant. It claimed that taxable services were provided and service tax was collected but not paid to the Government and hence confirmed the demand for the extended period based on third-party bank data after allowing abatements. The appellant, however, contends that the Revenue has failed to discharge its burden of proof....
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....artment's efforts to obtain information from the appellant as follows: "2. On 21.12.2011, the assessee produced the following documents vide their letter dated 21.12.2011. 1) Copy of VAT & Service Tax (Registration) Certificate 2) Copy of Income Tax Return, Bolance Sheet, P & L Account for assessment year 2010-11 & 2011-12 3) Copy of Bank Statements. 4) Copy of VAT Returns. 3. The assessee assured in the above said letter that they would submit the Invoice copies and Work order as soon as possible, but, even after lapse of two months, there was no response from the assessee. Hence, a summon dt. 06.03.2012 was issued to Shri. Dhanasekaran, Proprietor of M/s Altech Engineering to appear on 15.03.2012. 4. Shri Dhanasekaran did not appear on 15.03.2012 as per the direction of the summon, however he submitted a letter dt. 26.03.2012 thro' his messenger wherein he has stated that he has made a payment of Rs. 2,50,000/ towards service tax due vide Indian Overseas Bank's Challan No 1 dt. 15.03.2012 and assured to make further payment within ten days. 5 As the requisite particulars were not received from the assesse....
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....stantial evidence, an adverse inference may be drawn if the assessee withholds material exclusively in its possession. While the burden of proof remains constant, the onus is dynamic and shifts during adjudication, as reaffirmed in Mahakali Sujatha Vs Future Generali India Life Insurance Co. Ltd. - (2024) 8 SCC 712. Once the Revenue establishes a high degree of probability, failure by the assessee to rebut it results in the Revenue's burden being deemed discharged. Mere assertions regarding the nature of receipts and its inadequacy as proof do not constitute evidence. Accordingly, the appellant's averments lack merit. 8. While the appellant in this case have sought to rebut the data relied upon by the Revenue, they are being clever by not cooperating with the department in providing the information and material facts called for, in the first instance. In S.P. Chengalvaraya Naidu Vs Jagannath [ 1994 (1) SCC 1 ] the Hon'ble Supreme Court in no uncertain terms observed: "...The principles of "finality of litigation" cannot be passed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imp....