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2015 (10) TMI 1305 - AT - Service TaxBest judgement assessment u/s 72 Non submission of information hampered the determination of service tax liability and has not filed the return as well; thus invoking Section 72 Held That - Appellant filed the ST-3 returns regularly thus foundation of SCN that Appellant has not filed their return is incorrect. Regarding letters issued seeking information from the appellant - Held that - appellant has specifically asked the department to tell what information they require, but despite the appellant s request, it was not informed what information /details /documents were required for by the department to issue the show cause notice. In the absence of any document, nature of details which was sought to be asked from the appellant specifically, in that case, the show cause notice is only on the basis of assumption and presumption. No allegation held against the appellant that they have not filed the return and failed to assess the tax Provision of Section 72(b) are thus not attracted SCN is deficient and not maintainable Decided in favour of the assessee.
Issues Involved:
1. Maintainability of the show cause notice dated 12.10.2010. 2. Invocation of Sections 72 and 73 of the Finance Act, 1994. 3. Alleged failure to furnish returns under Section 70 of the Finance Act, 1994. 4. Alleged failure to provide requisite information/documents. 5. Simultaneous invocation of Sections 72 and 73. 6. Adjudicating authority traveling beyond the allegations in the show cause notice. Issue-Wise Detailed Analysis: 1. Maintainability of the Show Cause Notice: The appellant contested the maintainability of the show cause notice dated 12.10.2010, which was based on a previous show cause notice dated 8.4.2010. The appellant argued that the notice was issued on the premise that they failed to furnish returns under Section 70 of the Finance Act, 1994, which was factually incorrect as the returns were filed on time. The Tribunal found that the foundation of the show cause notice was incorrect, as the appellant had indeed filed their returns regularly. 2. Invocation of Sections 72 and 73 of the Finance Act, 1994: The show cause notice invoked both Sections 72 and 73 of the Finance Act, 1994. The appellant argued that these sections could not be invoked simultaneously. Section 72 pertains to best judgment assessment when returns are not filed or are incomplete, while Section 73 deals with recovery of service tax not levied or paid. The Tribunal noted that invoking both sections simultaneously was not permissible and made the show cause notice bad in law. 3. Alleged Failure to Furnish Returns under Section 70: The show cause notice alleged that the appellant failed to furnish returns under Section 70. However, the Tribunal found that the appellant had filed their returns on time, and the adjudicating authority's findings that the returns were incomplete were beyond the scope of the original allegations in the show cause notice. 4. Alleged Failure to Provide Requisite Information/Documents: The appellant was asked to provide details/documents/information through various letters, but the nature of the required information was not specified. The Tribunal observed that the letters did not clearly state what specific information was required and that the appellant's request for clarification was ignored by the department. This lack of specificity rendered the show cause notice deficient and based on assumptions. 5. Simultaneous Invocation of Sections 72 and 73: The appellant argued that the simultaneous invocation of Sections 72 and 73 was not maintainable. The Tribunal agreed, noting that best judgment assessment under Section 72 is independent of orders under Section 73. The determination of service tax liability in the show cause notice was already specified, which contradicted the purpose of a best judgment assessment. 6. Adjudicating Authority Traveling Beyond Allegations: The appellant contended that the adjudicating authority and the Commissioner (Appeals) had traveled beyond the allegations made in the show cause notice by introducing new grounds not originally mentioned. The Tribunal upheld this argument, stating that it is settled law that authorities cannot go beyond the scope of the show cause notice. The Tribunal cited the case of CC Mumbai vs. Toyo Engineering India Ltd. to support this point. Conclusion: The Tribunal concluded that the show cause notice was not maintainable due to its deficiencies and incorrect premises. The impugned order was set aside, and the appeal was allowed with consequential relief. Pronouncement: The judgment was pronounced in the open court on 06.10.2015.
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