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TMI Blog2015 (3) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of any material, we are unable to modify the order of the Tribunal on mere ipse dixit. - Order of tribunal upheld - Decided against the assessee. - Civil Miscellaneous Appeal No. 215 of 2015 & M.P.No.1 of 2015 - - - Dated:- 26-2-2015 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. N. Viswanathan For the Respondents : Mr.V.Sundaresswaran-R2 JUDGMENT (Judgment of the Court was delivered by R. Sudhakar,J.) This Civil Miscellaneous Appeal is filed by the assessee against the order passed by the Tribunal ordering pre-deposit, raising the following substantial questions of law: 1. Whether the Tribunal was right in ordering the pre-deposit for entertaining the appeal of the appellant even after admitting that the whole demand was made by the Revenue based only on the Profit and Loss Account without discharging the onus case on the Revenue that the appellant had rendered the taxable service and obtained the value thereof and that too by overlooking the very same financial statement showing the value on which the tax was demanded as a Sundry Debt, meaning amounts yet to be realized? 2. Whether the Tribunal was correct in recording the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey also earned income by way of recruitment consultancy charges. Based on this material, a show cause notice was issued demanding duty in respect of the services rendered for the period April 2006 to March 2009 under Section 73(1) of the Finance Act, 1994 and service tax payable under the head commercial training coaching services for the period April 2006 to March 2009 under Section 73(1) of the Finance Act, 1994. Besides the above-said demand, in respect of the wrong availment of cenvat credit, a show cause notice was issued proposing to demand interest and penalty. 3. After considering the reply submitted by the assessee in response to the show cause notice issued, the case was adjudicated by the jurisdiction Commissioner, who came to hold that the profit and loss account of the appellant showed income from operations - software development and consultancy and that was relatable to one M/s.Digipolis, a company registered in India with its registered office at Mumbai to whom development of competitive software similar to SAP was agreed upon for a consideration of ₹ 2.12 crores. The appellant/assessee denied this statement stating that the period of contract did not tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it was claimed that they recorded a transaction which did not take place. There were only two service receivers viz., M/s.Digipolis, company registered in India with its registered office at Mumbai and M/s.Rainstek Systems Pvt. Ltd. I find from the submissions of the noticee that there is a mere statement that the proposals in both cases did not take off. The department had discharged the onus by producing evidence in the form of universally acceptable financial statements and accounts of the noticee and therefore the onus got shifted to the noticee. The noticee did not let in any evidence to substantiate their claim either from the service receivers alleged to have paid the value of the services or any contra or reverse accounting entries or explained the circumstances as to how the business transactions collapsed in both the cases. Therefore, the inescapable inference evidenced by the circumstances and the audited Annual Reports is that the noticee had provided the taxable service and realized the value. 6. With the result, the Adjudicating Authority confirmed the demand as follows: 27. I hereby confirm the amount of ₹ 99,56,405/- (Rupees ninety nine Lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the software being developed by them to their employee on collection of certain amounts and paying them monthly stipend and since the company could not accomplish the project undertaken by them, the programme was cancelled. 9. The Tribunal taking note of the submissions made on both sides, was of the prima facie view that the demand of tax on management consultancy was based on the balance sheet figure. The Tribunal recorded that no material has been placed by the assessee to show that such services were not rendered and therefore there was no case for waiver of pre-deposit. The findings of the Tribunal is as follows: 4. After hearing both sides and on perusal of the records, we find that the demand of tax on management consultancy is based on the balance sheet figure. It is seen that the adjudicating authority had given detailed finding that the applicant had not placed any evidence in support of their contention that no amount was collected and no service was rendered by them. It is seen that the applicant had not placed any evidence to substantiate their claim either from the service recipient or any contra or reverse accounting entries or explained the circumstances a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court observed that if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Taking into account, the demand of tax of about ₹ 1.41 crores along with interest and penalty equal to tax, the direction of predeposit of ₹ 20 lakhs cannot be full or substantive part of the demand. Hence, the decision of the Hon'ble Supreme Court would not apply in the present case. 4. In view of the above discussion, we do not find any merit in the miscellaneous application filed for modification of the stay order. Accordingly, the application for modification of the stay order is rejected. However, considering the submission of the learned counsel, we extend the period of compliance by further four weeks and direct the applicant to report compliance on 18.12.2014. Miscellaneous application is rejected. 12. Aggrieved by the above-said order of the Tribunal dismissing the petition to modify the order directing pre-deposit, the appellant/assessee has filed the present Civil Miscellaneous Appeal. 13. Learned counsel appearing for the assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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