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TMI Blog2025 (4) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... 222C11 and SCN SI No 08/2021 dated 19.04.2021 proposing to demand service tax of Rs. 2,01,43,820/- for the period from 2015-16 to 2016-17 under the category of Works Contract Services and other Services by invoking proviso to section 73(1) of the Finance Act, 1994 and impose interest under section 75, and penalty under section 77(1), 77(2) and 78 of the Act. The same was adjudicated and the demand of Rs.4,87,597 was confirmed. The demand of Rs. 1,96,56,223/- was dropped. Penalty under section 77(1) and 77(2) and 78 of the Finance Act, 1994 was imposed. Aggrieved by the said order, the appellant has filed the present appeal. 3. Learned counsel for the appellant submitted that the demand is based on Form 26AS/ third party data. The courts in catena of decisions has held that Service tax demand cannot be based on third party data. Ld. Counsel relied on the following decisions: * Rishu Enterprises v. Commissioner of CGST & Excise, Dibrugarh 2024-TIOL-157-CESTAT-KOLKATA * Gopichenna vs. Commissioner of Central Tax, Medchal Final Order No. A/30078-30079/2024 * Indian Machine Tools and Manufacturing Association vs. CCE, Panchkula 2023 (11) CENTAX 213 (9) (Tri.-Chan.) Ld. Counsel c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng appropriate stamp duty was intended to authenticate the date on which the contract had been entered into. No other purpose would be served insofar as the legislative enactment. He relied upon the decision of the Tribunal in the case of Rare Townships Pvt. Ltd. Vs. Commissioner of CGST and Central Excise, Navi Mumbai Final Order No. 85856 of 2024 dt. 14.08.2024. Ld. Counsel stated that the contract is held to be under stamped, the substantial benefit of exemption notification cannot be denied on mere procedural lapse as the under stamping would be the fault of the main contractor. Further, ld. Counsel stated that the appellant had no part in such deficit payment. It is a settled position of law that the exemption notification should be construed strictly as per the wording of the notification. However, there is an exception if the exemption notification is a beneficial exemption having their purpose as encouragement or promotion of certain activities, then it should be liberally. He placed on the deicison in the case of Government of Kerala v. Mother Superior Adoration Convent. Since, the notification is on the government contracts with respect to roads, religions (tourism center ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of this Tribunal in the case of Indian Machine Tools Manufacturers Association Vs. CCE, Panchkula (supra) held as follows: "11. Coming to third and final issue as to whether any demand can be sustained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, we are of the considered opinion that it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets without proving that such service has been rendered by the assessee and consideration thereof has been received. Similarly, no service tax demand can be raised and confirmed on the basis of notional income. We find that Tribunal in the case of Synergy Audio Visual Workshop (P) Ltd. -2008 (10) STR 578 (Tri- Bang.) held that: 5.1 The other ground for confirming demands is that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver under the Service Tax as form 26AS is maintained on cash/receipt basis by the Income Tax department for the purpose of TDS etc. whereas the Service Tax is chargeable on mercantile basis (approval basis) on the services provided. Similarly, in the matter of Kush Construction v/s CGST Nachin, ZTI, Kanpur;2019 (24) GSTL-606 (Tri-All.) also it has been held that differences in figures reflected in ST-3 Returns and form 26AS cannot be basis for raising Service Tax demand without examining the reasons for such differences and without examining whether the amount as reflected in the said Income Tax Return was the consideration for providing any taxable services or the difference was due to any exemption or any abatement. Even otherwise in various decisions of the Tribunal it has been held that the figures in form 26AS are already included in Income Tax Returns in the Profit & Loss account and balance sheet which is a public document and the ST-3 Returns were also filed by the appellants regularly therefore, no suppression can be alleged and no evidence has been adduced by the Revenue to establish melafide intention for evasion of Service Tax and therefore extended period cannot be inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the parties in their Income Tax returns and Revenue has proceeded to demand Service Tax on this amount shown in the Balance Sheet. The appellants have relied on large number of judgments which has settled the issue that amounts shown in the Income Tax returns or Balance Sheet are not liable for Service Tax. In view of these judgments, the appellant succeeds on this ground also. The impugned order is set aside and the appeal is allowed." 12. We also find that Tribunal in the case of Indian Oil Corporation- 2020 (32) GSTL 350 (Tri. Kolkata) held that : 8. Having heard both the sides, we are of the view that the entire operation of transportation of the crude from Haldia port to BRPL is covered by a single contract. The terminal facilities are only intermediate operation of the transportation of the goods through pipeline. Since, the requisite amount of the service tax has already been paid on the service of transportation through pipeline provided by the respective parties, we feel that the terminal facilities being the integral part of the entire pipeline facilitating the transportation of the liquid crude, it will not be legally correct to consider the terminal facilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of presumptions about the consideration received by M/s. Sharma. The considerations taken into account for issue of Show Cause Notices was in no way near to the actual consideration received by M/s. Sharma during the relevant period which should be the basis for arriving at the assessable value. He has stated that they had elaborated before the Original Authority various reasons for discrepancies in the figures arrived at presuming the considerations received by M/s. Sharma on the basis of such TDS Certificates and the figures in the returns. He has further relied upon this Tribunal's Final Order in the case of Alpa Management Consultants P. Ltd. v. Commissioner of Service Tax, Bangalore reported in 2007 (6) S.T.R. 181 (Tri. Bangalore). He submitted that this Tribunal in the said case has held that demands, solely based on the income-tax returns for liability of Service Tax under Finance Act, 1994 is not sustainable. In respect of appeal filed by Revenue ld. counsel for M/s. Sharma has contended that the grounds of appeal are travelling beyond the Show Cause Notice and therefore that is not sustainable. He has further elaborated that cargo handling was brought in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transactions between other parties & appellant from form 26AS. Revenue could have investigated into the nature of such transactions & should have established that the said transactions were in respect of provision of said service. Then alone the charges of short payment of Service Tax would have sustained. We find that Final Order of this Tribunal in the case of Sharma Fabricators Pvt. Ltd. (supra) is squarely applicable in the present case. We, therefore, hold that Revenue did not discharge its burden to prove short payment of service tax. We also hold that the said show cause notice dated 05.10.2016 is not sustainable." 9. Further, in the case of Raj Kumar Verma vs. Commissioner of Central Excise and Central Goods Service Tax, Ujjain Final Order No. 58606 of 2024 dated 19.09.2024 ( Tri. - Del. ) this Tribunal observed as under:- "10. Coming to the issue of invocation of extended period of limitation while issuing the impugned show cause notice, I observe that the non- filing of ST-3 returns is alleged as the act of suppression. However, it has been observed that even in reply to the show cause notice, the appellant had explained that exemption being arising from notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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