The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the department failed to prove discrepancy between figures in balance sheets & service tax returns.
The bench of P. Anjani Kumar (Technical Member) has observed that there is discrepancy between the figures reflected in balance sheets etc. and the service tax Returns. No effort to co-relate the income/ receipt shown in the balance sheet to any particular service rendered by the appellants to any particular entity appears to have been made. It is not open for the Department to allege evasion of service tax.
Background
The appellants/assessee is engaged in providing Security/Manpower Supply Service, Cleaning Service, Works Contract Service, Horticulture Service, Management and Business Consultant Service.
The department issued the summons to the appellant in 2018 and called for certain documents like balance sheet, ST-3 Returns, 26AS etc. A Show Cause Notice was issued to the appellants demanding service tax. The recovery sought was on account of difference between balance sheet and ST-3 Returns, service provided to SEZ and other operating income; the Show Cause Notice was adjudicated by the Assistant Commissioner, Central Tax, Gurugram confirming the demand proposed in the Show Cause Notice along with equal penalty.
Commissioner (Appeals) upheld the demand and confirmed the order and partly remanded the matter to the lower authority on the issue of availability of exemption on service provided to SEZ developers and service tax on other operating income.
Arguments
The assessee contended that the dispute pertains to the period April 2016 to June 2017 and the Show Cause Notice issued beyond the permissible period of 30 months. All the documents called for by the Department have been submitted in 2018 itself. It is not a case of fraud, collusion, willful mis-statement, suppression of facts or contravention of the provisions of the law with intent to evade payment of duty.
The assessee contended that levy of service tax on the service rendered to SEZ developers, that as the A-2 certificate was issued common to four service providers, the original could not be handed over by the SEZ authorities. Accordingly, the appellant has submitted a copy of the same. They have also filed an affidavit in this regard and therefore, the demand of service tax on this count is not sustainable. As far as the last issue of levy of service tax on other “operating income” is concerned, it was due to the recovery of bad debts on which service tax has already been paid.
Conclusion
The tribunal while allowing the appeal held that the onus to prove the nexus between consideration and the service is on the Department who have made the allegations and issued the Show Cause Notice. Moreover, it is not open for the Revenue to invoke extended periods under such circumstances. When no positive act, with intent to evade payment of duty, on the part of the appellant has been shown, has been evidenced.
Case Title: M/s Sarvatra Integrated Management Service Pvt. Ltd. Versus The Commissioner of CGST & Central Excise, Gurgaon
Case No.: Service Tax Appeal No.60176 of 2023
Date: 17.09.2024
Counsel For Appellant: R.S. Sharma
Counsel For Respondent: Harish Kapoor
