TaxTMI 
TaxTMI 
2025 (4) TMI 1848
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....4 of the Central Goods & Services Tax Act, 2017 as discussed above. (ii) I order to recover the interest at applicable rate from the party on the confirmed amount under Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017. (iii) I impose penalty of Rs.6,94,842/- (Rupees Six lakh ninety four thousand eight hundred - forty two only) equal to the Service Tax amount liable upon the party under Section 78 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017, as discussed above for suppression of facts and contravention of the provisions of the Finance Act (ibid) and rules made thereunder. However an option is given to party under sub Section (1) (ii) of Section 78 of the Finance Act 1994 that if the Service Tax along with interest is deposited within thirty days of communication of this order, the amount of penalty liable to be paid by the party shall be twenty five percent of the Service Tax so determined in the order. Provided that the benefit of reduced penalty under the second proviso shall be available only if the amount of such reduced penalty is also paid within such perio....
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....ad failed to file their ST-3 returns for the period April'15 to September'15 and October'15 to March'16 2.5 A show cause notice dated 19.12.2020 was issued to the appellant asking them to show cause as to why: (i) An amount-(Gross). of Rs.47,92,016/- received by the party from, their, client during the financial years from. 2015-16, in lieu of providing the, services of "Declared Services' should not be treated as the-total value of taxable services (ii) Not paid Service Tax amount Rs.6,94,842/- (inclusive all cess) for the period 2015-16 as discussed above, should not be demanded and recovered from them under the proviso to Section 73 (1) of the Finance Act, 1994 read with Section 174 of the Central GST 'Act 2017. (iii) Interest on the amount as mentioned at (ii) above should not be charged, and recovered under Section 75 of the Finance Act 1994 read with Section 174 of the CGST Act, 2017 (iv) Penalty should not be imposed under Section 78 of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 for failure to-pay Service Tax during the' relevant period suppressing the facts from the department. However....
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....he Income Tax Department under data exchange policy. ⮚ has been passed holding that the appellant's engagement in declared service which is vague and department has to specify the service. ⮚ Income of Rs.2,01,84,900/- was declared by the appellant in their Income Tax Return for 2015-16 to obtain tender from M/s. Gail (India) Ltd., Pata ⮚ Demand has been raised on Rs,47,92,016/- whereas, income as per ITR is Rs. 2,01,84,900/- which establishes that the said figures have been picked hypothetically. ⮚ As per State Bank of India, Branch Pata a/c no. 10754279058 of the appellant, it may be noted that no amount has been shown in their bank for providing service except Rs.5,000/-. ⮚ As per the Income Tax Return for F.Y. 2015-16, it is the only account of the appellant. ⮚ Appellant has indicated this amount in his balance sheet only for the reason to make it look attractive for the purpose of obtaining the contract from GAIL. They have not provided any service against the receipt of this amount. Even the 26AS Form of the Appellant do not show that this amount has been received against provis....
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....ppellant relating to ex-parte passing of the impugned order without any evidence of providing any service only on the basis of third party information received from the Income Tax Department under data exchange policy as a result, the allegation of appellant's engagement in declared service is vague and department has to specify the service. In this regard, I take on record statement of profit and loss for the year ended on 31st March, 2016 and on referring to its entry no. 1, I note that Revenue from operations' has been mentioned as Rs.2,01,84,900/- with Note No 15. Now, on referring to Note 15 relating to Revenue from operations, I find that particular has been mentioned as "Sale of services (Refer Note (i) below)' and in Note (i) it has been mentioned that :- Sale of services comprises: Job Work Received 20,184,900.00 Total - Sale of services 20,184,900.00 A careful reading of the above contents of the profit and loss account of the appellant, it becomes apparent that they were engaged in Job work in lieu of which monetary consideration to the tune of Rs.2,01,84,900/- had been received by them. Needless to say that the said sta....
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....akh rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial year, Now on cross-examining the above statutory provision with both the facts of the case and documentary evidences submitted by the appellant it becomes apparent that there is no documentary evidence on record to establish that job work carried out by the appellant falls under the category of either of the above mentioned services. Also, there is no corroborative evidence to establish that the excise duty has been paid by them and not by the principal which helps me to construe that the appellant was engaged in business auxiliary service which categorical specification of service which was rendered by them Now I take up the contention of the appellant relating to declaration of Rs. 2,01,84,900/- in their Income Tax Return for 2015-16 to obtain tender from M/s. Gail (India) Ltd., Pata while as per their bank statement they had only received monetary consideration of Rs. 5,000/- while demand has been raised on monetary consideration of Rs. 47,92,016/- which according to them, means that the said figures....
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....ndings that it has travelled beyond both the show cause notice and order. Now, on applying the ratio of above judgment in the present appeal, I am bound to restrict the demand of service tax to the tune of Rs.6,94,842/- on monetary consideration of Rs.47,92,016/- which has been issued vide Show Cause Notice No. 116/ST/AC/CGST/Div.FZD/ 2020-21 dated 09.12.2020 and confirmed vide the impugned order and hold the same to be recoverable Hence, as per discussion in the preceding paras I uphold confirmation of demand of service tax of Rs.6,94,842/- under Section 73(1) of the Finance Act, 1994 read with Section 142 and 174 of CGST Act, 2017 along with interest under Section 75 of the Finance Act, 1994 read with Section 142, 173 & 174 of CGST Act, 2017 and penalty imposed under Section 78 of the Finance Act, 1994 read with Section 142, 173 & 174 of CGST Act, 2017. Further, in the ratio of judgment of Hon'ble CESTAT, Allahabad judgment in Vasan Traders vs. Commissioner of Central Excise & Service Tax, Lucknow reported at 2019 (28) GSTL 1 16 (Tri .- All.) wherein, it has been categorically stated that :- "However, as regards imposition of penalty in ter....
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....stained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, we are of the considered opinion that it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets without proving that such service has been rendered by the assessee and consideration thereof has been received. Similarly, no service tax demand can be raised and confirmed on the basis of notional income. We find that Tribunal in the case of Synergy Audio Visual Workshop (P) Ltd. - 2008 (10) STR 578 (Tri- Bang.) held that: 5.1 The other ground for confirming demands is that the appellants had shown certain amounts due from the parties in their Income-tax returns and Revenue has proceeded to demand service tax on this amount shown in the Balance Sheet. The appellants have ....
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.... Service Tax is chargeable on mercantile basis (approval basis) on the services provided. Similarly, in the matter of Kush Construction v/s CGST Nachin, ZTI, Kanpur;2019 (24) GSTL-606 (Tri- All.) also it has been held that differences in figures reflected in ST-3 Returns and form 26AS cannot be basis for raising Service Tax demand without examining the reasons for such differences and without examining whether the amount as reflected in the said Income Tax Return was the consideration for providing any taxable services or the difference was due to any exemption or any abatement. Even otherwise in various decisions of the Tribunal it has been held that the figures in form 26AS are already included in Income Tax Returns in the Profit & Loss account and balance sheet which is a public document and the ST-3 Returns were also filed by the appellants regularly therefore, no suppression can be alleged and no evidence has been adduced by the Revenue to establish melafide intention for evasion of Service Tax and therefore extended period cannot be invoked. The recent decision of the Tribunal on this issue of extended period in such type of cases is by the Kolkata Bench of the Tribunal vide ....
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....nce Sheet. The appellants have relied on large number of judgments which has settled the issue that amounts shown in the Income Tax returns or Balance Sheet are not liable for Service Tax. In view of these judgments, the appellant succeeds on this ground also. The impugned order is set aside and the appeal is allowed." 12. We also find that Tribunal in the case of Indian Oil Corporation- 2020 (32) GSTL 350 (Tri. Kolkata) held that: 8. Having heard both the sides, we are of the view that the entire operation of transportation of the crude from Haldia port to BRPL is covered by a single contract. The terminal facilities are only intermediate operation of the transportation of the goods through pipeline. Since, the requisite amount of the service tax has already been paid on the service of transportation through pipeline provided by the respective parties, we feel that the terminal facilities being the integral part of the entire pipeline facilitating the transportation of the liquid crude, it will not be legally correct to consider the terminal facilities as independent facilities for which no real transaction of service charges have actually taken place and therefo....
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....of presumptions about the consideration received by M/s. Sharma. The considerations taken into account for issue of Show Cause Notices was in no way near to the actual consideration received by M/s. Sharma during the relevant period which should be the basis for arriving at the assessable value. He has stated that they had elaborated before the Original Authority various reasons for discrepancies in the figures arrived at presuming the considerations received by M/s. Sharma on the basis of such TDS Certificates and the figures in the returns. He has further relied upon this Tribunal's Final Order in the case of Alpa Management Consultants P. Ltd. v. Commissioner of Service Tax, Bangalore reported in 2007 (6) S.T.R. 181 (Tri. Bangalore). He submitted that this Tribunal in the said case has held that demands, solely based on the income-tax returns for liability of Service Tax under Finance Act, 1994 is not sustainable. In respect of appeal filed by Revenue ld. counsel for M/s. Sharma has contended that the grounds of appeal are travelling beyond the Show Cause Notice and therefore that is not sustainable. He has further elaborated that cargo handling was brought in as ground by R....
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....t. It was possible for Revenue to know the transactions between other parties & appellant from form 26AS. Revenue could have investigated into the nature of such transactions & should have established that the said transactions were in respect of provision of said service. Then alone the charges of short payment of Service Tax would have sustained. We find that Final Order of this Tribunal in the case of Sharma Fabricators Pvt. Ltd. (supra) is squarely applicable in the present case. We, therefore, hold that Revenue did not discharge its burden to prove short payment of service tax. We also hold that the said show cause notice dated 05.10.2016 is not sustainable." 4.4 In case of Deltax Enterprises, referred by the Counsel for appellant, Delhi Bench held as follows: 4. Admittedly, the appellant did not maintain detailed accounts for all the transactions undertaken by them. They have availed the provision of Section 44AD of Income-tax Act for filing returns. This formed basis for service tax demand as the income shown is much higher than the declared consideration for taxable service. We note that the appellants categorically asserted that they did not provide any other s....