2024 (9) TMI 927 - AT - Service Tax

Recovery of service tax along with interest and penalty, for the period October 2004 to March 2008 - amounts received by the bank under various Heads like amounts written of; insurance commission; postal charges recovered and miscellaneous income - HELD THAT - While the first three categorically do not appear to involve any service by the appellants, learned Consultant for the appellants submits that the miscellaneous income is on account of sale of scrap etc. On the whole, the income appears to be revenue income in nature and not a consideration towards any taxable service rendered by the appellants. It is the responsibility of the Revenue to identify the service provider, the service rendered and the remuneration received before proceeding to recover service tax. No such effort has been made. Moreover, the case is made on the basis of the difference between ST-3 Returns and financial records without identifying the service and the remuneration. Under the circumstances, the Show-Cause Notice and the resultant impugned order cannot be legally sustained. The appeal is allowed.

Summary

The Appellate Tribunal CESTAT CHANDIGARH allowed the appeal of Central Bank of India against a Show-Cause Notice issued by Revenue for recovery of service tax. The Tribunal held that the Revenue failed to identify the taxable service rendered by the bank before seeking to recover service tax on various income sources. The impugned order was not legally sustainable. The appeal was allowed.