2019 (5) TMI 976 - AT - Service Tax

Mandap Keeper service - case of appellant is that appellant are not providing such service - HELD THAT - Both the firms are providing Outdoor Catering Service, whereas Mandap keeper Service is not provided by the Appellant and it is exclusively provided by M/s V.K.Bhandari. Therefore, even if entries of the services provided by the two firms are in the common records, it cannot be held that the Appellant M/s Bhandari Caterer is liable of evasion of tax of Mandap Keeper Service, as this service is being provided exclusively by the another registratant i.e M/s V.K.Bhandari. The Firm M/s V.K. Bhandari is owned by Shri V.K.Bhandari father of Shri Santosh Bhandari (Appellant) and even if he had assisted in the activities of his father s firm M/s V.K.Bhandari, which is a separate legal entity and providing Mandap Keeper Service, demand in respect this service cannot be raised on the Appellant, as they are not providing Mandap Keeper Service. There is no evidence, in the form of statement of any person, whose, names are appearing in the entry to confirm that Mandap Keeper service was provided to them. The allegation of provision of service is made only on the basis of entries in the record without any evidence to support these allegations. The demand is thus raised on the basis of mere assumption and presumption that premises were rented against such entry. In absence any such corroborative evidences to support the allegation, demand is not sustainable. Outdoor Catering Service - Appellant s argument is that as against various entries of the enquires, they have provided catering service for a few entries, however, the Department has presumed that catering was provided against all enquiry appearing in the record - HELD THAT - The Department has not substantiated the allegation about service provided by conducting further enquiries in the form of statement from the person whose names were appearing in the suggestive menu/quotation for which no bill was raised, to confirm that they have availed catering service from the Appellant. The SCN alleges provision of service for several crore against which tax is not discharged, however, there are no evidence of recovery of unaccounted money. Thus, demand is raised on merely on the assumption that catering was provided by the appellant against all the entries in the resumed document. There are no corroborative evidences for such allegation, in absence of which, allegation as contained in the Show Cause Notice cannot survive. Consequently, demand is not maintainable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Demand of service tax on Mandap Keeper Service.
2. Demand of service tax on Outdoor Catering Service.
3. Validity of demand based on entries in records and data retrieved from electronic devices.

Issue-wise Detailed Analysis:

1. Demand of Service Tax on Mandap Keeper Service:
The appellant contested the demand for Mandap Keeper Service on the grounds that this service was exclusively provided by M/s V.K. Bhandari, a separate legal entity owned by Shri V.K. Bhandari, and not by the appellant, M/s Bhandari Caterers. The appellant argued that even though entries related to Mandap Keeper Service appeared in common records, the demand should be raised against M/s V.K. Bhandari, not the appellant. The Tribunal found that the appellant did not provide Mandap Keeper Service and that the service was indeed provided by M/s V.K. Bhandari. The demand was based on entries in records presumed to be service provisions without corroborative evidence. The Tribunal held that the demand raised on the appellant for Mandap Keeper Service was not sustainable due to lack of evidence and corroboration.

2. Demand of Service Tax on Outdoor Catering Service:
The demand for Outdoor Catering Service was raised based on entries in seized documents, which the appellant claimed were merely records of customer inquiries and quotations, not confirmations of services provided. The appellant maintained that only a few inquiries materialized into actual catering services for which bills were issued and service tax was paid. The Tribunal noted that the department had not substantiated its allegations with corroborative evidence from customers or recovery of unaccounted money. The demand was based on assumptions that all entries in the records indicated services provided, which the Tribunal found unsustainable. The Tribunal emphasized the need for corroborative evidence to support the allegations, which was absent in this case.

3. Validity of Demand Based on Entries in Records and Data Retrieved from Electronic Devices:
The Tribunal observed that the demand was also raised based on data retrieved from laptops, computers, and CPUs without following the procedure outlined in Section 36B of the Central Excise Act, 1944, applicable to service tax matters under Section 83 of the Finance Act, 1944. The Tribunal referenced the case of M/s Popular Paints and Chemicals vs. CCE, CESTAT Delhi, to highlight the procedural lapses. Consequently, the demand based on electronic data was deemed unsustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal with consequential benefits as per law. The demand for service tax on both Mandap Keeper Service and Outdoor Catering Service was found to be based on assumptions and presumptions without sufficient corroborative evidence. The procedural lapses in handling electronic data further invalidated the demand. The Tribunal emphasized the necessity of concrete evidence to substantiate allegations of service tax evasion.