19 - Demand and Recovery

Yes. In the case of R Deivendran [2009 (1) TMI 68 - CESTAT, CHENNAI], it was held that the appellant herein is claimed to be an illiterate person and had rented a vehicle to M/s. BSNL for its staff to compute between their respective residences and the office. The lower authorities have found the service tax of ₹ 9,080/- payable by the appellant as he had wilfully suppressed the fact of rendering taxable service. I find that there is nothing on record to substantiate the above finding. The claim that such an allegation had not been made in the show-cause notice is also not contested. In the circumstances I find that the demand of service tax and the penalties adjudged in the impugned order are not sustainable. 

Ignorance of law or illiteracy can undermine findings of willful suppression, affecting the validity of tax demand and penalties. Administrative demands and penalties based on alleged willful suppression of taxable services require supporting record evidence and must correspond to allegations in the show cause notice; where the record does not substantiate suppression and the allegation was not made in the notice, the resultant service tax demand and penalties are not sustainable.