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2023 (9) TMI 927 - CESTAT KOLKATANon-payment of service tax - Supply of Tangible Goods Service - suppression of gross amount received by them in respect of services - invocation of extended period of limitation - penalty u/s 78 of FA. The demand notice was issued based on the data received from the Income Tax Department. HELD THAT:- The impugned order concluded that in these Bills the Appellant has charged rent on the tangible goods namely, JCB and Trucks, on the basis of number of days of hire. Prior to 01.07.2012, such supplies were liable to service tax under the category of 'Supply of tangible goods' as defined under Section 65(105)(zzzzj) of the Finance Act, 1994. With effect from 01.07.2012, the transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of right to use such goods has been declared as 'deemed service'. Accordingly, the impugned order has justified the demand of service tax by treating the entire amount shown in the AS26 statements as amount received towards rendering of taxable service. From the records it is observed that no effort has been made by the department to ascertain whether the right to use the JCBs and Trucks have been transferred to the customers or retained by the Appellant. Without such ascertainment, it would not be possible to conclude whether the service would fall within the ambit of 'deemed service' or not. The Appellant relied on the decision of the Tribunal in the matter of M/S KUSH CONSTRUCTIONS VERSUS CGST NACIN, ZTI, KANPUR [2019 (5) TMI 1248 - CESTAT ALLAHABAD] and contended that the liability of service tax cannot be determined merely on the basis of Income Tax Returns / Form 26AS - From the decision cited, it is observed that the demands confirmed merely on the basis of the data available in the Income Tax Returns/AS26 Statements is not sustainable. It must be established that the amount shown in the AS26 statements are actually received in connection with taxable service rendered by the Appellant. As the department has not brought in any positive evidence to substantiate the allegation that the amounts received are towards rendering of taxable service liable for service tax, the demand confirmed in the impugned order is not sustainable. Imposition of penalty under section 78 of the Finance Act, 1994 - HELD THAT:- No evidence has been brought on record to establish that the appellant has rendered any taxable service liable for service tax. As the liability of service tax on the Appellant was not established, the question of evasion of tax or having an intention to evade tax does not arise. Accordingly, no penalty is imposable under Section 78 of the Finance Act, 1994 and the same is set aside. Appeal allowed.
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