2024 (7) TMI 13 - AT - Service Tax

Levy of service tax - income shown in the income tax returns from Sale of Services - exemption under Mega Exemption N/N. 25/2012 - HELD THAT - The transporters provided the service of transportation of goods by road to the consigners/consignees and the charges have been collected by the appellant from those GTA in respect of those vehicles owned by the appellant. The said service provided by the appellant is covered under exemption vide Mega Exemption N/N. 25/2012-ST dated 20.06.2012. It is found that since the appellant did not facilitate the department in verifying the correctness of their averment till the order under challenge dated 31.03.2023 was passed the appellant had failed to provide any fresh document with respect to the amount received for which the service tax liability has been confirmed. Pursuant to the directions of remand that bills invoices and bilties raised by the appellant and recipient of service should have been received and fresh speaking order to be passed thereafter. There is no other document for the purpose. The fresh plea of seeking exemption of Mega Notification cannot be adjudicated in the absence of the requisite and sufficient documents. Accordingly there are no infirmity in the findings of the adjudicating authority below - appeal dismissed.

Summary

Issues involved:
1. Whether the appellant is liable to pay service tax on income shown in income tax returns.
2. Whether the appellant qualifies for exemption under Mega Exemption Notification No. 25/2012.
3. Whether the appellant is entitled to Small Scale Industry (SSI) exemption.
4. Whether the demand for service tax is barred by limitation.
5. Whether penalties imposed are justified.

Detailed Analysis:

1. The appellant, a service tax registration holder, was informed by the Revenue Department about income shown in income tax returns, leading to a demand for service tax. The original adjudicating authority dropped the demand on a portion of the income but confirmed service tax on the remaining amount. The Commissioner (Appeals) remanded the matter back due to new information about vehicles being given on hire, covered under Mega Exemption Notification. The original authority, upon remand, found the appellant had not provided sufficient documents, leading to confirmation of service tax demand. The subsequent appeal was rejected, prompting the appellant to approach the Tribunal.

2. The appellant argued that the service provided through hiring transport vehicles is exempt under Mega Notification No. 25/2012. They claimed to have produced invoices and bilties as evidence, qualifying for the exemption. Additionally, they asserted eligibility for SSI exemption and tax benefits, while contending that the demand was time-barred. The appellant cited a precedent to support their case.

3. The department countered, stating that the appellant did not respond to the show cause notice initially, leading to an ex parte order. Despite remand, the appellant allegedly failed to provide the necessary documents, with the department finding the evidence insufficient to support the appellant's claims. The department argued that the new plea regarding vehicles hired out lacked adequate documentation and was not sustainable. They sought dismissal of the appeal.

4. The Tribunal observed that while a portion of the demand was dropped, the remaining amount lacked supporting documents from the appellant, especially concerning the hire of vehicles. Only six bilties were produced, which raised discrepancies and were insufficient to verify the claims made by the appellant. The Tribunal upheld the findings of the lower authorities, concluding that the appellant failed to provide necessary documents for the Mega Notification exemption claim. Consequently, the appeal was dismissed, affirming the service tax demand.

5. The Tribunal's decision was based on the lack of adequate documentation from the appellant to substantiate their claim for exemption under Mega Notification No. 25/2012, leading to the dismissal of the appeal and upholding of the service tax demand.