2012 (7) TMI 708 - AT - Service Tax

Service Tax demand on the basis on Audit Report - Held that - Both the authorities have not correctly examined the issue, by taking into account the balance sheet, profit and loss account and the other relevant documentary evidences - if the revenue is making an allegation that the appellant has realised service consideration to the tune of Rs.339 crores, as against 337 Crores as reflected in balance sheet, it is for the revenue to establish the said fact while producing sufficient evidences on record as even audit reports, on the basis of which allegations have been made, do not stand supply to the appellant - set aside the impugned order and remand the matter to the original Adjudicating Authority with directions to supply the basis of making the allegation of realisation of more amount for the services provided by them and to examine the documentary evidences - in favour of assessee by way of remand.

Summary

Issues: Allegation of excess billing and realisation of service consideration, incorrect findings based on balance sheet, failure to provide audit report, appropriate examination of documentary evidence.

The judgment by the Appellate Tribunal CESTAT, New Delhi involved the appellant, engaged in telecommunication services, contesting a show cause notice alleging excess billing and realisation of service consideration. The appellant argued that the figures reflected in their balance sheet contradicted the allegations, and they requested the source of the information and the audit report, which was never provided. The original Adjudicating Authority observed that the appellant did not deny the excess billing, but the appellant contested this, pointing out discrepancies in the balance sheet and the confusion in the findings of the Appellate Authority. The Adjudicating Authority did not rely on the balance sheet provided by the appellant, considering it a duplicate. The Tribunal noted that both lower authorities failed to properly examine the issue, emphasizing the importance of considering the balance sheet, profit and loss account, and other documentary evidence. The Tribunal emphasized that the revenue had the burden to establish the alleged realisation of service consideration and supply relevant evidence. As the audit report was not provided to the appellant, and the examination of the balance sheet was deemed inappropriate, the Tribunal set aside the impugned order and remanded the matter to the original Adjudicating Authority. The Authority was directed to provide the basis for the allegations, examine the documentary evidence, and re-adjudicate the case without expressing any opinion on the merits. The stay petition and appeal were disposed of accordingly.