2022 (7) TMI 768 - CESTAT AHMEDABAD

Evasion of Service tax - Presumption with regards to documents and records - collection of Service tax from their customers but the documents like debit notes which are so called supplied by the recipients is not authenticated - whether the appellant can submit additional documents / records and additional evidences before the appellate tribunal in their support? - HELD THAT:- This Tribunal being a final fact finding authority can very well admit fresh evidence and argument. This issue has been considered by the Hon‘ble Supreme Court (Three Judges Bench), in the case of NATIONAL THERMAL POWER COMPANY LIMITED VERSUS COMMISSIONER OF INCOME-TAX [1996 (12) TMI 7 - SUPREME COURT], which is to the effect that the Tribunal has jurisdiction to examine the question of law which arises on facts, as found by the authorities below, and having bearing on tax liability of assessee, even though said question was neither raised before the lower authorities nor in appeal memorandum before the Tribunal, but sought to be added later as an additional ground by a separate letter.

In view of Section 36A of Central Excise Act, 1944 it is only when such document is tendered in evidence against the person who produced the same or from whose custody or control it was seized that the presumption under Section 36A is available - In the present case admittedly none of the alleged documents was produced by the Appellant or seized from the Appellant‘s premises or control. In view of the above, when the presumption under Section 36A is not available, the burden of proof is squarely on the Department to prove that the source documents related to the Appellants and that any taxable services under the source documents were actually provided by the Appellant. This burden has not been discharged by the revenue in the present case.

In terms of Rule 2(1)(d) of Service tax Rules, 1994 and Circular No. 96/7/2007-ST dtd. 23.08.2007 and in terms of Circular No. 96/7/2007 -ST dtd. 23.08.2007 the service tax was liable to be paid by the Service recipient. Therefore, on the said activity of Appellant demand of service tax is not sustainable.

The demand of service tax (except the amount of service tax payable as per the appellant, admitted by the appellant and deposited as stated in the appellant‘s submission) interest and penalty is not sustainable and the same is accordingly set aside - appeal allowed.