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TMI Blog2024 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... st 10% is towards other services rendered or to be rendered by them and in terms of Section 67 of the Finance Act 1994 such amounts are includable in the gross value of service for the purpose of levying of service tax. It cannot be understood as to how the Commissioner comes to the conclusion that this 10% of the income or advances shown in the books of accounts of the appellants leads to the inevitable conclusion that the amounts were for provision of certain services - there are no specific service has been identified by the Adjudicating Authority, while accepting in principle that duty evasion cannot be proved with mathematical precision, the same cannot be established by applying a mathematical formula - Courts and Tribunal have been consistently holding that service tax cannot be fastened without identifying the specific service provided and consideration received or to be received for the same. Tribunal has held in the case of Shubam Electrical [ 2015 (6) TMI 786 - CESTAT NEW DELHI] which was upheld by Supreme Court in [ 2016 (5) TMI 1055 - DELHI HIGH COURT] that We notice that in the show cause, neither any period has been specified nor any amount of demand quantified. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of services rendered by the appellant did not warrant collection of advances and on the contrary in many cases credit was extended for recovery of the consideration. Learned Counsel submits that to be exigible to service tax, any of the services listed under Section 66 should have been rendered and any amount received for the same, before, during or after provision of such service, shall be deemed to be the consideration; Revenue relied on Section 67(1)(i) without applying the rules in entirety. Learned Counsel submits that the provisions related to service tax would give an understanding that taxability is subject to performance of an identified taxable service under any of the clauses of Section 65(105) of the Act and the amounts received, as consideration for the provision of such service, prior to or during or after provision of service; the department has neither alleged nor indicated the exact taxable service which was agreed upon to be provided against the said advances received. He submits that the demand was confirmed on the basis of a presumption that the advances would have been attributable to any of the service provided by the appellant; he submits that no l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciliation of various branch accounts, discounts and time lagging receipts from corporate credits against invoices to the customers. Learned Counsel submits that the impugned proceedings are legally invalid as they have been initiated wholly on the basis of audit objections and a selective approach in reading the financial statements ; no independent investigation or analysis was carried out by the Revenue before issuing the show cause notice; in the absence of independent investigation demand cannot be sustained as held in Sharma Fabricators and Erectors Pvt Ltd., Vs CCE, Allahabad [2017-TIOL-3191-CESTAT-ALLA] affirmed by Allahabad High Court in [2019-TIOL-492-HC-ALL-C.Ex]. Learned Counsel also submits that the demand is time barred as no mala fide was established on the part of the appellant and no suppression can be alleged. He further submits that in case the demand is held to be sustainable appellants are eligible to claim cum tax benefit. Lastly, he submits that interest and penalties cannot be imposed when the demand itself is not sustainable; moreover, penalty under Section 76 and 78 cannot be imposed separately as held in Care and Cure Pvt Ltd., Vs Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e , so going by the assesses s version that 90% of their business is related to Air Travel Agent Service and 10% attributed to other services provided by the assessee, the plain calculations of their income as per their balance sheets of 4 years may be done easily as follows: 1 2 3 Year Income in Balance Sheet (In Rs. Crores) 10% income attributable to other services as put forth by the assessee (in Rs. Crores) 2006-07 35.92 3.59 2007-08 49.56 4.96 2008-09 58.85 5.89 2009-10 52.31 5.23 I cannot ignore the common trend of the business at large, and going by the common trend of the other 10% services provided by the assessee, advance payments are generally accepted in such provision of the services for keeping the customers committed and to recover the cost of the resources which might be put into use while providing of such services. Thus, the version of assessee that only credit balances of their air travel customers occur in their advance from customers ledger is not acceptable or justified. The assessee did not even consider to mention these aspects which also play an important role in their business. Thus, I find that the assessee has failed to establish their version, duly subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied. We find that Learned Commissioner has considered the appellant submission that 90% of their income is towards air travel agency service and that in provision of such service no advances were being taken. Interestedly, Learned Commissioner uses the submission of the appellant to come to the conclusion that if 90% of the receipts is for the air travel agency service, the rest 10% is towards other services rendered or to be rendered by them and in terms of Section 67 of the Finance Act 1994 such amounts are includable in the gross value of service for the purpose of levying of service tax. We fail to understand as to how the Commissioner comes to the conclusion that this 10% of the income or advances shown in the books of accounts of the appellants leads to the inevitable conclusion that the amounts were for provision of certain services. We find that no specific service has been identified by the Adjudicating Authority, while accepting in principle that duty evasion cannot be proved with mathematical precision, the same cannot be established by applying a mathematical formula. We find that Courts and Tribunal have been consistently holding that service tax cannot be fastene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant had provided copies of 20 work orders executed in relation to CWG Projects, particulars of which are set out in a tabular form in para 5 of the show cause notice. From the description of the works in this table, officers could have classified the several works into the appropriate taxable service which may appropriately govern rendition of these services. In any event officers are not handicapped and the Act provides ample powers including of search under Section 82 of the Act to obtain information necessary to pass a proper, disciplined and legally sustainable adjudication order. The disinclination to employ the ample investigatorial powers conferred by the Act is illustrative of gross Departmental failure and cannot afford justification for passing an incoherent and vague adjudication order. The failure to gather relevant facts for issuing a proper show cause notice cannot provide justification for a vague and incoherent show cause notice which has resulted in a serious transgression of the due process of law. 6. We have considered the facts of the case. We notice that in the show cause, neither any period has been specified nor any amount of demand quantified. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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