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2024 (6) TMI 771 - AT - Service TaxIssues Involved: 1. Determination of service tax not levied or not paid u/s 73 of Finance Act, 1994. 2. Proper determination of the value of taxable services for charging service tax. 3. Sustainability of the impugned order in law. Summary: Issue 1: Determination of Service Tax Not Levied or Not Paid u/s 73 of Finance Act, 1994 The Tribunal noted that u/s 66B of the Finance Act, 1994, service tax is levied at 14% on the value of service, and u/s 67, the value is the consideration in money charged by the service provider. It is crucial to determine the value of taxable service by excluding activities covered by the negative list u/s 66D and those not included in the definition of service u/s 65B(44). Thus, the correct value of taxable service must be determined as the first step to ascertain the amount of service tax not paid or levied. Issue 2: Proper Determination of the Value of Taxable Services The Tribunal found that the Revenue's determination of a taxable value of Rs.7,19,93,389/- based solely on data from income tax returns, without examining the appellant's records, was presumptive. The show cause notice lacked evidence to establish that the said amount was consideration received for providing services. The Tribunal referenced several precedent decisions, including Umesh Tilak Yadav, Modern Road Makers Pvt. Ltd., and SBI Life Insurance Co. Ltd., which held that demands based solely on differences between figures in income tax returns and ST-3 returns, without examining the reasons for such differences, are not sustainable. The Tribunal concluded that the show cause notice was not sustainable in law. Issue 3: Sustainability of the Impugned Order Given that the show cause notice was found unsustainable, the Tribunal set aside the impugned order passed by the Commissioner (Appeals) and allowed the appeal. Consequently, the cross application filed by the Revenue was dismissed. Additional Note on Concurring Order: Dr. Suvendu Kumar Pati concurred with the findings, emphasizing that the order by the Commissioner lacked reference to the defense reply to the show cause notice, which is essential u/s 73(2) of the Finance Act, 1994. The adjudicating authority's computation based on income tax TDS data, without proper examination of the appellant's records, was deemed improper. Thus, the appeal was allowed, and the impugned order was set aside with consequential relief. (Order pronounced in the open court on 10.06.2024)
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