2019 (7) TMI 1885 - AT - Service Tax

Evasion of service tax - Supply of Tangible Goods Services - invocation of extended period of limitation solely based upon the profit and loss account and 26AS form submitted with the Income Tax Authorities which has been held to be as not proper - HELD THAT - Inasmuch as the revenue s entire case is based upon the profit and loss accounts read with the 26AS Form and the service tax stands confirmed by invoking the longer period of limitation the impugned order of Commissioner (Appeals) is not sustainable on limitation itself. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax liability for the period 2010-11 to 2013-14 and subsequent period.
2. Classification of services under "Supply of Tangible Goods Services."
3. Merits of the appellant's argument regarding job-work using owned cranes.
4. Invocation of longer period of limitation for raising the demand.
5. Reliance on profit and loss account and 26AS Form for confirming tax liability.
6. Applicability of previous decisions by the Tribunal and High Court.

Analysis:

1. The appellant was registered with the Service Tax Department for providing taxable services. The revenue alleged that the appellant had evaded service tax liability for the mentioned periods due to providing services under the category of "Supply of Tangible Goods Services." Two show cause notices were issued, demanding around ?21.73 lakhs approximately, which were confirmed by the lower authorities along with interest and penalties.

2. The appellant contested the order on merits and limitation, arguing that the activities involved job-work using owned cranes and were not taxable as they related to construction activities like road construction. The appellant also challenged the reliance on the profit and loss account and 26AS Form for raising the demand, citing previous decisions by the Tribunal and High Court that deemed such reliance irrelevant for tax confirmation.

3. The Tribunal noted that the revenue's case was primarily based on the profit and loss accounts along with the 26AS Form, and the service tax demand was confirmed by invoking the longer period of limitation. Referring to previous decisions, the Tribunal found the reliance on profit and loss accounts for tax confirmation to be improper. Consequently, the impugned order of the Commissioner (Appeals) was deemed unsustainable on limitation grounds, leading to the appeal being allowed in favor of the appellant with consequential relief.

This judgment highlights the importance of proper assessment and evidence in determining tax liabilities, emphasizing the need for accurate documentation and adherence to legal principles in tax proceedings.