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TMI Blog2022 (4) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Disclosure Scheme (IDS) 2016. The Revenue approached the Deputy Director (Cost) to work out the gross receipts /revenue in respect of the cash amount of Rs. 32.50 Crores deposited in the bank/declared under IDS. The Deputy Director (Cost) after considering the various financial aspect, furnished report dated 22.10.2019 wherein the gross receipts/ revenue was worked out and estimated as Rs. 86,87,78,400/- The said investigation was culminated into show cause notice where the amount of Rs. 32,50,10,000/-considered as profit and gross receipts worked out at Rs. 86,87,78,400/- in respect of the said profit. Demand of service tax of Rs. 3,90,95,028/- along with interest under Section 75 and penalty under Section 77 and 78 of the Finance Act, 1994 was proposed on gross receipt considered as taxable value towards rendering taxable service.The said notice was adjudicated by the Principal Commissioner, Ahmedabad vide impugned order. He confirmed the impugned demand along with interest and penalty and in addition, Penalty of Rs. 1 Lakh was also imposed on Shri Mukesh R Agarwal, Director of Appellant Company. Aggrieved by the impugned order the present Appeals have been filed. 02. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income which was chargeable to tax and the same was not declared in the Income Tax Returns filed with the Income Tax Department. The meaning of "income" has been defined under Section 2 (24) of the Income Tax Act, 1961. The definition of income is very wide, and it covers all types of income. Therefore, the income declared by the Appellant under the IDS scheme does not mean that the Appellant earned the amount from taxable service which is chargeable to service tax in terms of Finance Act, 1994. The revenue failed to appreciate the definition of "Service" provides under Section 65B(45) of the Act. 2.2 He also submits that merely amount shown in the financial statements without adducing any evidence, cannot be considered as taxable service. He placed reliance on the following decisions:- * M/s MPA Marketing Pvt. Ltd. Vs. Commissioner of Central Excise - 2020(1) TMI 370, * Go Bindas Entertainment Pvt. Ltd. Vs. CST -2019 (27) G.S.T.L. 397 (Tri.), * Vijay Packaging Systems Ltd. Vs CCE - 2018 (262) ELT 832, * Beekaylon Synthetics Vs CCE - 2003 (158) ELT 307. 2.3 He further argued that respondent erred in relying the letter dated 22.10.2019 issued by the Deputy Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of C. Ex, S.T. - 2019 (25) G.S.T.l. 486 (Del) * Dharmashi Agencies Vs Union of India -SCA 8255/2019 * Tube Investment of India Vs Union of India 2018 (16) GSTL 376 (Mad.) 2.7 Without prejudice he also submits that they should be extended the benefit of cum-tax -value, for which he relies upon the decision of * Sri Chakra Tyres Vs CCE (Madras) 1999 (108) ELT 361, * Rohit Detective & Security Agency Vs CCE - 2009 (14) STR 689 (T) * Gem Star Enterprises Pvt Ltd. Vs CCE - 2007 (7) STR 342. 03. On other hand Shri T.G. Rathod, the learned Departmental Representative, defended the impugned order by reiterating the finding of Commissioner. He submits that the circular relied upon by the Appellant itself clearly indicate that Preventive and Offence related to SCN have been kept out of purview of pre-show cause notice consultation. The Circular No. 25/2016 dated 30.06.2016 and 27/2016 dated 14.07.2016 issued by the CBDT clarified that declared income will not be shared with any other law enforcement agency. The said circulars issued with regards to IDS and all that circular says it that the Income tax department will not share the details to declaration with any other law en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er IDS scheme were collected for providing services of construction Service. There is merit in the contention of the appellant that it is settled principal of law that the burden of proving a fact is on the person who alleges the same but the department did not produce any evidence on record to prove that the disclosed Income under Income Tax Disclosure Scheme, 2016 pertained to construction activity and that the charges of income was generated out of taxable activity without any evidence was not sustainable in the absence of cogent, convincing and tangible evidences. Income tax and service tax are two different/ separate and independent special Act and their provisions operating in two different fields. Therefore by relying the income disclosed in income tax provision, without undertaking any independent investigation under the Service Tax Act, demand of service tax cannot be made. 4.3 We observed that the Hon‟ble Madras High Court in the matter of Commr. Of Income tax, Trichy vs. Amman Steel & Allied Industries 2015(330) ELT 130 (Mad.) held that 12. This Court is of the considered view that the finding of the CIT (Appeals) as well as the Tribunal that merely on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act have been designed with the object of achieving that purpose." Coming to the Foreign Exchange Regulation Act, it is a special law which prescribes a special procedure for investigation of breaches of foreign exchange regulations. Vide Shanti Prasad Jain v. Director of Enforcement [1963] 33 Comp Cas 231; [1963] 2 SCR 297. The proceedings under the Foreign Exchange Regulation Act are quasi-criminal in character. It is pellucid that the ambit, scope and intendment of these two Acts are entirely different and dissimilar." The above decision of the Supreme Court is squarely applicable to the facts of the present case and, therefore, we have no hesitation to hold that the method adopted by the CIT (Appeals) with regard to taxation under the Income-tax Act, as affirmed by the Tribunal, is the correct method of determining the income based on the unaccounted turnover. 4.4 We also find that the said issue has been considered by the Tribunal in various decisions. In the case of M/s. Commissioner of Central Excise, Ludhiana Vs Mayfair Resorts 2011 (21) S.T.R. 589 (Tri. - Del.) (supra), the Tribunal had held as under:- "4. Heard both sides and have gone through the evidence on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igarh v. Bindra Tent Service - 2010 (17) S.T.R. 470 (Tri.-Del.)and held that "5. After hearing both the sides and on perusal of the records, it is seen that the respondents surrendered the amount to the Income Tax Department during the survey on 6-1-2006. It was explained that whenever surrender of amount was made under the Income-tax Act, it is added to the income in the assessment year 2005-06 (relevant to the previous year) for the purpose of charging income-tax. The amount surrendered represents the established accumulated effect of undisclosed incomes for the earlier financial years since 1999-2000. The Original Authority observed that the respondents failed to produce any evidence regarding income of the said amount shown to the Income Tax Department that income was from other sources. In this context, the findings of the Commissioner (Appeals) are reproduced below :- "8. The main issue in these appeals is whether the income surrendered by the appellants to the income-tax department can be taken as the value of taxable service for charging service tax. It is observed that the Hon'ble CESTAT in the final Order No. 1147-2008-SM (BR) dated 28-3-2008 passed in the case of Kip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s much higher than the declared consideration for taxable service. We note that the appellants categorically asserted that they did not provide any other service other than those, the details of which have been submitted to the lower authorities. The Revenue also could not point out excess receipt on these contracts or the taxable service which gave them the consideration escaping the tax.In the absence of specific allegation with reference to the nature of service or the service recipient it is not tenable to hold an income of the appellant even if it is admitted to be an actual income, as consideration for a taxable service. The minimum requirement to tax an assessee for service tax is to identify the nature of their taxable service along with the recipient of such service. In the present case all identified contracts for the identified service recipients have been examined and concluded by the lower authority. No service tax liability can be fastened on unidentified service for unidentified service recipient. There is no provision for such summary assumption even under Section 72 of the Finance Act, 1994. Admittedly, the said section provides for arriving at the taxable value to ..... 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