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2023 (12) TMI 46 - AT - Service TaxExtended period of limitation - Demand based on Form 26AS (TDS Statement) - entire proceedings has been carried out on the basis of information available in Form 26AS of Income Tax department - suppression of fact sor not - HELD THAT - It is observed that the Service Tax Department has demanded service tax solely on the basis of the data provided by the Income Tax Department, which is the gross value as received by the Appellant. The department has not conducted any verification to ascertain whether the amount mentioned in the Form 26AS was received on account of providing any taxable service by the Appellant.It is observed that the demand of Service Tax cannot be made solely on the basis of difference between Income tax return and 26AS Statement, as held by the Tribunal in the case of M/S KUSH CONSTRUCTIONS VERSUS CGST NACIN, ZTI, KANPUR 2019 (5) TMI 1248 - CESTAT ALLAHABAD . The same view has been taken by the Tribunal, Kolkata, in the case of M/S LUIT DEVELOPERS PRIVATE LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, DIBRUGARH 2022 (3) TMI 50 - CESTAT KOLKATA wherein it has been held that the figures reflected in Form 26AS cannot be used to determine Service Tax liability unless there is evidence shown that it was due to a taxable service. The Notice in this case was issued on 08.09.2021, demanding service tax for the period 2016-17. The Department has not adduced any positive evidence to show malafide intention or mens rea for evasion of Service Tax on the part of the Appellant. Thus, the extended period cannot be invoked in this case to demand service tax on the Appellant. On perusal of the documents, it is found that the entire demand has been raised beyond the normal period of limitation. In view of the discussions above, the demand of service tax by invoking extended period is not sustainable in this case. Accordingly, it is held that the demand is liable to be set aside on the ground of limitation. The impugned order set aside - appeal allowed.
Issues:
The issues involved in the judgment are the demand of Service Tax based on Form 26AS data and the invocation of extended period of limitation. Issue 1: Demand of Service Tax based on Form 26AS data The Appellant contended that the demand in the case was barred by limitation as the proceedings were solely based on information from Form 26AS of the Income Tax department. They argued that since these figures were included in the Profit/Loss Account in the Balance Sheet, there was no suppression. The Appellant also emphasized that the Department did not provide any positive evidence to demonstrate malafide intention or mens rea for Service Tax evasion. Citing the decision in Aban Lyod Chiles Offshore Ltd. vs. CCE, the Appellant asserted that invoking extended period of limitation without justification when all facts were known to the Department was not valid. The Appellant further argued that the demand of Service Tax cannot be solely based on Form 26AS data without verifying if the amount received was for taxable services, as supported by previous tribunal decisions. Issue 2: Invocation of extended period of limitation The Appellant challenged the invocation of the extended period of limitation for demanding Service Tax. They highlighted that the Department relied solely on data from Form 26AS without verifying if the amount received was for taxable services. The Appellant referenced tribunal decisions, such as Luit Developers Pvt. Ltd. vs. Commissioner, CGST, to support their argument that Form 26AS figures alone cannot determine Service Tax liability without evidence of it being due to a taxable service. The Appellant maintained that the Department failed to show malafide intention or mens rea for Service Tax evasion, rendering the demand unsustainable. The Tribunal held that the demand beyond the normal limitation period was not justified, setting aside the demand and concluding that interest and penalty were not applicable due to the unsustainable demand. Separate Judgement Delivered: The judgment was delivered by Hon'ble Mr. K. Anpazhakan, Member (Technical) at the Appellate Tribunal CESTAT Kolkata on 22.11.2023.
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