2022 (8) TMI 832 - AT - Service Tax

Non-payment of service tax - manpower supply service - differences in the figures reflected in ST-3 Returns and in form 26AS - extended period of limitation - HELD THAT - It has been settled by way of various decisions of the Tribunal that the Revenue cannot raise the demand on the basis of merely differences without establishing that the entire amount received by the appellant as reflected in form 26AS is consideration for services provided because it is also not proper to presume that the entire differential amount was on account of consideration for providing services without verifying it. It is the specific case of the appellant that the amount shown in Form 26AS by the service recipient have not been received by the appellant. Tribunal in the matter of M/S QUEST ENGINEERS CONSULTANT PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX AND CENTRAL EXCISE 2021 (10) TMI 96 - CESTAT ALLAHABAD in which the co-ordinate Bench of the Tribunal has held that form 26AS is not a statutory document for determining the taxable turnover under the Service Tax as form 26AS is maintained on cash/receipt basis by the Income Tax department for the purpose of TDS etc. whereas the Service Tax is chargeable on mercantile basis (approval basis) on the services provided. Extended period of limitation - HELD THAT - 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 appellant has failed to adduce any evidence/document in support of their claim that the said amount has not been received by them or that the invoices/bills were cancelled. The appeal of the appellant is partly allowed.

Summary

Issues:
1. Appellant challenging Order-in-Appeal rejecting appeal and upholding Adjudicating Authority's decision.
2. Discrepancies in figures between ST-3 returns and form 26AS leading to Service Tax demand.
3. Alleged non-payment of Service Tax on certain invoices to M/s. ISGEC, Yamuna Nagar.

Analysis:
1. The appeal was filed against the Order-in-Appeal rejecting the appellant's appeal and confirming the demand for Service Tax along with interest and penalty imposed by the Adjudicating Authority. The Commissioner of CGST, Panchkula (Appeals) upheld the decision, leading to the appellant's challenge.

2. The appellant, providing taxable services under 'manpower supply', faced discrepancies in figures between ST-3 returns and form 26AS for the period 2013-14 to 2016-17. The Service Tax demand of Rs. 4,12,478/- was based on differences in income reflected in the two documents, including excess income in form 26AS compared to ST-3 returns. The appellant contested this demand, arguing that the Revenue must establish that the entire amount in form 26AS was consideration for services provided. Citing precedents, it was emphasized that form 26AS is not determinative for Service Tax purposes, and the burden of proof lies with the department to show the extra payments received by the appellant.

3. Regarding the demand of Rs. 38,357/- related to four invoices, the appellant failed to provide supporting documents to prove non-receipt of the amount or cancellation of invoices. Despite the appellant's willingness to pay the service tax amount on these invoices, the lack of evidence led to a decision against the appellant on this issue. The judgment highlighted the importance of substantiating claims with proper documentation in such cases.

4. The decision partially favored the appellant based on the analysis presented. The judgment emphasized the necessity of evidence to support claims and the burden of proof in tax-related matters. The discussion included references to relevant case laws and precedents to support the reasoning behind the decision. The judgment was pronounced on 08.08.2022 by Mr. Ajay Sharma, Member (Judicial) at the Appellate Tribunal CESTAT Chandigarh.