TaxTMI 
TaxTMI 
2026 (7) TMI 98
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....vance payment as negative (-ve) Debtors and hold not leviable to service tax, though the said payment was actually an advance payment as held by Audit report? (ii) Whether the Hon'ble CESTAT is correct in holding that the demand is not sustainable without considering that the Respondent, in case of some of entries showing the negative balance has agreed with the objection and paid the tax, interest and penalty and in respect of other entries did not agree as this fact has been clearly brought out by the adjudicating authority in his findings? (iii) Whether the CESTAT is correct in holding that all amount has suffered tax without examining the records and evidence? (iv) Whether Order of CESTAT recording wrong facts, data and not discussing, examining the evidence amounts to perversity or not? (v) Whether the CESTAT is right in ignoring standard and recognized accounting practice and accept the peculiar accounting System? (vi) Whether the Hon'ble CESTAT is correct without looking in to the fact that Respondent being a Chartered Accountant of international repute and professionally well conversant with the accounting procedures, wou....
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....ceived from their debtors should have been shown separately in the balance sheet; either as advance or an amount payable for the services rendered by such debtors to the assessee in order to determine the tax liability. Considering such entries in the debtors' accounts, a show-cause notice was issued on 28.08.2014 for levy of service tax on such negative entries in the debtors' accounts found by the audit party for the period from October 2008 to March 2012 proposing a demand short-paid service tax along with interest and the imposition of penalty. 5. The assessee filed reply to the show cause notice contending inter alia that the negative entries shown in the debtors' accounts pertained to the expenses charged by the network firms of the assessee for the services provided by them. It was contended that there were two-way services with the network firms; services were provided by the assessee and also the services were received by the assessee in return. As per the accounting practice adopted by the assessee, amount owed by the network firms to the assessee for services provided are shown as debts under those debtors and the amount which the assessee owed to the network firms fo....
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....lant [Debtors] 5.4 The appellant maintained a current account with the network firms and by issue of debit notes they were able to make adjustments of the amount to the paid and to be received by them in respect of network firms. It is seen that the network firms have raised invoices on the appellant collecting the Service Tax from the appellant. For the payments along with Service Tax made to network firms the appellant has availed credit of such Service Tax as input service and there is no dispute in this regard. 5.5 The statement of Shri Yogesh G. Shah partner of the appellant was recorded on 14.08.2014. It is stated by him as answer to question no.12 that whenever an advance is taken, an invoice is raised on the client collecting the Service Tax. To the question no. 28 'why figures showing as in bracket in the list of outstanding debtors as on 31.03.2012?' the said partner has replied as under: "In reference to our letter dated 03.04.2014, we have already provided the rationale for the figures showing in brackets for an amount aggregating to Rs. 36.33 crores out of the total amount of Annexure-D aggregative to Rs.39.66 crores. We are submittin....
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....on merit is answered in favor of appellant. 5.8 The Ld. Counsel has argued on the grounds of limitation also. It is seen that the demand has been raised pursuant to audit verification. The audit report dated 17.02.2014 at para 8 shows the objection raised by the audit team of non payment of Service Tax due to the peculiar accounting system of the appellant. The appellant has issued series of reply, explaining why they happened to show 'debtors' as negative balance. The SCN dated 28.08.2014 is issued for the period from 10/2008 to 3/2012. It is seen that prior to this an audit for the period April 2004 to March 2010 was conducted. The final audit report for this period has not objected to the accounting system or raised an query in this regard. This audit was conducted on 09.03.2011 and 11.03.2011. Later, for the period 2010-2011 audit was conducted on 30.01.2012, 31.01.2012 and 07.02.2012. The final audit report for this period also does not raise any objection as to the accounting method adopted by the appellant. Much later, after audit report dated 13.02.2014, this SCN has been issued alleging suppression of facts. All the transaction and figures are mentioned by....