TaxTMI 
TaxTMI 
2026 (6) TMI 5
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....ndering of Telecommunication Service, Consulting Engineer Service, Commercial Training and Coaching Service & Goods Transport Agency Service and is registered with the jurisdictional Service Tax Department. The issue involved in both the appeals is demand of service tax based on difference in value between Trial Balance (TB) and ST-3 returns for the periods April 2011 to March 2012 and April 2010 to March 2011, respectively. Alleging that the appellant has not paid the appropriate service tax on comparison of Trial Balance (TB) and the amounts declared in ST-3 returns 2(two) show cause notices were issued on 12.07.2013 and 10.12.2012 involving a service tax demand of Rs. 63,53,769/- and Rs. 12,88,071/-, respectively. In Appeal No. ST/20222/2015, on adjudication Commissioner has confirmed the service tax along with interest and no penalty was imposed. In Appeal No. ST/ 21284/2017, Adjudicating Authority confirmed the service tax demand along with interest and imposed penalty of Rs 6,44,035/- and on appeal Commissioner (Appeals) upheld the order. Aggrieved by the impugned orders the appellant filed the above 2(two) appeals before the Tribunal. 3. The learned counsel for the appell....
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....tained specific application software for billing and collection for all their services provided during the relevant period of dispute. The Appellant was generating sub-ledger accounts from the application software which contains the details of taxable and non-taxable services, age-wise debtors, bills raised in advance for the services yet to be provided and bills yet to be raised for the services that were already provided, etc. Based on the sub-ledger, the corresponding journal entries were passed which were then reflected in the head-of-account-wise ledgers; the closing balances in each ledger are tabulated to prepare the Trial Balance (TB) which serves as the final financial record at the SSA level; the profit and loss account and balance sheet are prepared only at the Circle level; since the Trial Balance contains only the closing balances of each ledger account, no detailed breakup can be derived from the same. Therefore, demand of service tax without ascertaining the service-wise or transactions-wise details, verification of Sub-ledger Records (SLR) and by solely placing reliance on Trial Balance is unsustainable in law; the Respondent Service Tax Department has considered th....
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....inable in law; further it is well settled law that demand of service tax solely based on difference in value between Trial Balance / Balance Sheet and ST-3 returns is legally unsustainable in the absence of corroborative evidence. Further the burden is on the Revenue to prove the same with corroborative evidence. However, no such attempts have been made by the Department, nor any clarification has been sought before issuance of show cause notice. 7. The Learned counsel placed reliance in support of the above averments on the following decisions: a. BSNL Vs. CST - 2010 (20) STR 55 (Tri.-Bang.) b. BSNL Vs. CGST & CEX. Final Order No. 41213/2025 dated 30.10.2025 c. Go Bindas Entertainment Pvt. Ltd. Vs. CST., Noida 2019 (27) GSTL 397 (Tri.-All.) d. South Eastern Coalfields Ltd. Vs. CCE & ST (2024) 17 Centax 245 (Tri.-Del.) 8. The Learned counsel further submits that; the Appellant being a Public Sector Undertaking, there cannot be any suppression of facts with intent to evade payment of service tax; merely because there is difference in value between Trial Balance and ST-3 returns that by itself will not lead to suppression of facts....
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....value as per section 67(1) of the Act read with Service Tax (Determination of Value) Rules, 2006. The actual value is represented by the credit balances is the difference between progressive credits and progressive debits and therefore the demand of short payment of service tax arrived at by adding progressive credit is untenable. Further we find that the value of sundry debtors has on 31.03.2011 for quantification of service tax is contrary to the Point of Taxation Rules, 2011 as it enjoins the taxpayers to pay service tax even for the services billed but not collected up to 01.03.2011. We find that the appellant has contended that they have adopted the Point of Taxation Rules, 2011 with effect from 01.07.2011 in terms of Rule 9 ibid, therefore the taxable service in their case will be collection of telecommunication revenue for the period up to 30.06.2011 and telecom services billed for the services provided from 01.07.2011 to 31.03.2012. The department has proceeded to demand service tax on the entire outstanding debtors as on 31.03.2011 without taking into consideration the closing balance, which resulted in short payment of service tax which is unsustainable. We find that the ....