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2015 (6) TMI 786 - CESTAT NEW DELHI

2015 (6) TMI 786 - CESTAT NEW DELHI - 2015 (40) S.T.R. 1034 (Tri. - Del.) - Default in remitting the service tax dues - Improper details in SCN - Specific taxable service not mentioned in SCN - Held that:- It is a axiomatic that a best judgment assessment under Section 72 could only be for ascertaining the quantum of the tax liability, in a context where the actual extent of liability cannot be determined with methematical precision on account of non-availability of relevant documents or financi .....

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f guess-work or speculation.

Neither the show cause notice dated 21/10/11 nor the impugned adjudication order dated 18/1/13 record any assertion/ conclusion whatsoever as to which particular or specific taxable service the appellant had provided. In the absence of an allegation of having provided a specific taxable service in the show cause notice and in view of the failure in the adjudication order as well, neither the show cause notice nor the consequent adjudication order could be .....

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facts for issuing a proper show cause notice cannot provide justification for a vague and incoherent show cause notice which has resulted in a serious transgression of the due process of law. - Decided in favour of appellant. - Service Tax Stay Application No. 57519 of 2013 in Appeal No. 56958 of 2013 - Final Order No. 51964/2015 - Dated:- 16-6-2015 - Hon ble Shri Justice G. Raghuram, President And Hon ble Shri Rakesh Kumar, Member (Technical),JJ. For the appellant Shri A.K. Batra, C.A. and Varu .....

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the respective parties. 2. Proceedings were initiated by a show cause notice dated 21/10/11. The show cause notice and the impugned adjudication order are vitiated by incoherence and vagueness, to which aspect we shall advert to in some detail, later herein. 3. The show cause notice asserts that : (a) the appellant was registered for providing Works Contract Service, taxable under Section 65 (105) (zzzza) of the Act ; (b) that information was gathered by the Anti-Evasion Branch, Delhi which reve .....

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ts such as audited financial statements and the like; that the appellant failed to respond; thereupon reminder letters were issued; that the appellant vide his letter dated 17/6/11 furnished certain documents including copies of its registration certificate, balance sheets from 2005-2006 to 2009-2010, service tax returns with challans, copies of award letters received from DDA/CPWD etc. and information of having received ₹ 375.16 lakhs for CWG works and had intimated that pending amount wo .....

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pellant appears to have rendered taxable services but failed to remit the tax due. 4. In para 8 of the show cause notice, which we consider critical to the validity of the show cause notice, it is stated :- 8. Whereas from the documents submitted by the party it appears that they have rendered the taxable services which may either be classified under Management, Maintenance or Repair service or Erection, Installation and Commissioning services and other construction linked services as defined un .....

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provided under Section 72 of the Act is being pursued for valuation of the tax liability for the year 2010-2011, on account of absence of audited balance sheets for this period. In para 11, the quantum of liability to service tax is set out while noting that since the required documents/information was not provided by the appellant, income having a probability of classification under the Act is being taken as the value of the taxable services. In para 12 of the show cause notice, at more than on .....

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for providing works contract service it is clear that it was aware of the provisions of the Act and thus it is justifiable to invoke the extended period of limitation on account of fraud, collusion etc. 6. Suffice it to notice that in the entirety of the show cause notice there is not a single assertion proposing to levy and collect service tax on the basis of any specified taxable services allegedly rendered by the appellant except the several alternative taxable services speculated to have bee .....

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r the composition scheme provided in Works Contract Composition Scheme Rules, 2007 should be granted; that a substantial number of the works executed were non-commercial and non-industrial in nature and therefore fall outside the ambit of commercial or industrial construction service, prior to 01/6/07 as also sub-clause (b) of explanation (ii) of Section 65 (105) (zzzza), post 01/6/07; that the show cause notice was ambiguous and vague since it failed to specify the exact taxable service under w .....

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es provided for non-commercial Government buildings during the period 16/6/05, till the Negative Tax Regime (whole of the period of the services provided by the appellant). This interim response was followed by another reply to the show cause notice, dated 10th January 2013, reiterating the same claims/defenses. 8. Learned Consultant for the appellant adverts to page 11 of the memorandum of appeal which sets out in a tabular form the total consideration received by the appellant during the relev .....

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2013, after the impugned order was passed and the present appeal preferred. We are recording this fact only to complete the narrative. 9. The impugned adjudication order is drafted in 32 paras spread over 22 printed pages. Paragraphs 1 to 17 reiterate almost verbatim, the contents of the show cause notice dated 21/10/11. Para 18 elaborates the response of the appellant and its several defences to the vague and incoherent allegations in the show cause notice. Para 19 sets out particulars of the p .....

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ld alone be considered, if at all, the analysis by the learned Commissioner. Para 29 asserts that none of the contentions of the appellant are tenable since it failed to provide the required information to the Department during investigation. It is also observed that the appellant obtained service tax registration for Works Contract on 10/12/07 and was therefore aware of the applicable law. From this observation, the Commissioner infers that the appellant willfully suppressed the fact of earning .....

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rable under the proviso to Section 73 (1) of the Act alongwith interest, excluding penalty under Section 76. Para 32 records the operative portion of the order declaring the specified liability to service tax, interest and penalties. 10. It is a axiomatic that a best judgment assessment under Section 72 could only be for ascertaining the quantum of the tax liability, in a context where the actual extent of liability cannot be determined with methematical precision on account of non-availability .....

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d clarity and not by a process of guess-work or speculation. 11. Neither the show cause notice dated 21/10/11 nor the impugned adjudication order dated 18/1/13 record any assertion/ conclusion whatsoever as to which particular or specific taxable service the appellant had provided. In the absence of an allegation of having provided a specific taxable service in the show cause notice and in view of the failure in the adjudication order as well, neither the show cause notice nor the consequent adj .....

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