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TMI Blog2024 (7) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... on (44) of Section 65B of Finance Act, 1994. The statements of the appellant s accountants cannot be the basis to consider such amounts as taxable value without any corroborative evidence of actual provision of services against such amounts. Moreover, such statements are not relevant in absence of examination of deponents as per the mandate of section 9D of the Central Excise Act, 1944 applicable to the provisions of Finance Act, 1994. In the present matter the Adjudicating Authority has failed to follow the requirement of Section 9D of the Act applicable to the provisions of Finance Act, 1994 regarding examination in chief of witness, therefore the statements of persons are not relevant and cannot be relied upon. Since department has not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant provided sales bill, bank statement, catering booking menu, order booking book for the period 2009 -2010. Further in response to the summons dated 8.2.2010, the representative of the appellant Shri Bhavesh F. Shah and Shri Jayanti A. Shah, Accountant of the appellant vide their letters dated 10.02.2010 and 15.02.2010 submitted that appellant had paid all the service tax dues till December 2009 and in support they submitted bank s collection counter foil duly stamped by bank along with the statement of periodical summary. Thereafter summons were issued from March 2010 to July 2010, however the same were not attended to or answered by the appellant. 1.2 On 21.12.2011 search was carried out at the appellant s premises and June 2012 onward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness Auxiliary Services and filed Service Tax returns for the disputed period. That the demand of Service Tax amounting to Rs. 40,42,214/- has been raised by the department solely based on the bank statements of the appellant, assuming the deposits made in the bank accounts as taxable value for rendering services. That the department has erroneously presumed that all bank deposits constitute taxable value without establishing any correlation between such deposited amounts and the actual provision of taxable services. That the appellant had provided a detailed summary and supporting documents to substantiate that the bank deposit did not represent taxable value but were cash deposits from previously accounted sources unrelated to taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the submission made by both the sides and perused the records. The issue to be decided in the present case is whether demand of service tax based on the differential amount worked out comparing the bank statement and ST-3 returns can be taken as taxable value under Section 67 of the Finance Act, 1994. It can be seen that although inquiry and investigation was carried out in the matter from 2009 to 2013, there is no averment in the show cause notice as to how the differential amount as per the bank statement can be said as derived from the consideration received by the appellant out of the activity of service under sub-section (44) of Section 65B of Finance Act, 1994. The statements of the appellant s accountants cannot be the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. In the present matter the Adjudicating Authority has failed to follow the requirement of Section 9D of the Act applicable to the provisions of Finance Act, 1994 regarding examination in chief of witness, therefore the statements of persons are not relevant and cannot be relied upon. 4.1 It is further observed that although appellant have provided all the information to the department in the month of February 2010 and furnished records including payment of service tax upto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of services under the Finance Act, 1994. It is essential to establish that value on which such service tax was calculated was in terms of section 67 of the Act and that it represented consideration for activity which satisfied definition of service under Section 65B(44) of the said Act. iii. Maheshwari Transport v. Commissioner of Central Excise Service Tax, Raigad - (2024) 16 Centax 206 (Tri.-Bom): The Tribunal held that a demand of service tax based on a contradictory and presumptive show cause notice, alleging a mismatch between ST returns and IT returns, was not sustainable. Following the aforesaid decisions of tribunal and high court, demand of service tax is liable to be set aside. Since demand of tax is not sustainable, penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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