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2023 (8) TMI 48 - CESTAT MUMBAIDemand of Service Tax alongwith interest and penalty - commission income - difference in ST-3 return and 26AS statement - HELD THAT:- The show cause notice dated 16.04.2019 states that the same is enclosed with two annexures. Annexure- I is work sheet. The work sheet states the turnover of the respondent for the year 2013-14 as reflected in income tax return and turnover reflected in ST-3 return as nil and the difference between the two turnovers and service tax @ 12.36% on the said difference. Annexure-II is a letter dated 25.10.2018 issued by Superintendent (Data Cell) presuming that the respondent has shorted reported turnover in their ST-3 return to the extent of difference stated in Annexure-I. The entire show cause notice nowhere examines as to on what account the turnover has taken place. The said show cause notice was issued without examining the activity of the respondent and without examining the reason for difference in turnover reported in income tax return and ST-3 return. It was presumed in the show cause notice that the entire turnover reported in income tax return was on account of provision of taxable service and by calculating 12.36% of that turnover, service tax demand was raised. The fundamentals of prosecution such as framing charges on the basis of admissible evidence is absent in issue of show cause notice. The present show cause notice is totally presumptive. Further, the difference in turnover in ST-3 return and income tax return could be on account of non-taxable businesses. So, unless Revenue examines the reasons for the difference, it cannot demand service tax blindly on the basis of difference in the turnover reflected in the two statutory returns. In the case of M/S LORD KRISHNA REAL INFRA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS, C.E. & S.T., NOIDA [2019 (2) TMI 1563 - CESTAT ALLAHABAD], it was held that on the basis of form 26AS return filed under Income Tax Act without examining any other records of the appellant, charges of short payment of service tax to the tune of 8 crores were made against the appellant. It was possible for Revenue to know 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. The present show cause notice is totally presumptive. Therefore, there are no infirmity in the order-in-original to the extent that the demand of service tax of Rs.292,86,63,640/- is dropped by the original authority. Insofar as the confirmation of demand of service tax of Rs.87,676/- and its equal penalty are concerned and interests on the same are concerned, the same are set aside for the reason that the show cause notice is not sustainable - dropping of the demand of service tax of Rs.292,86,63,640/- by the Commissioner upheld, while setting aside the remaining part of the impugned order. Appeal of Revenue dismissed.
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