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TMI Blog2024 (10) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... liability was worked out as Rs.5,59,777/-. Hence Show Cause Notice (SCN) dated 28.4.2021 was issued demanding differential service tax amount of Rs.5,59,777/- along with interest as also for imposing penalty under sec. 77 and 78 of the Finance Act, 1994. After due process of law, the original authority confirmed the demand along with interest and imposed penalties under sections 70, 77 and 78 of the Finance Act, 1994. In appeal, the Commissioner (Appeals) upheld the same. Hence the present appeal before this appellate forum. 3. Shri S. Satish Chandrasekaran, learned Counsel appeared for the appellant and Shri Harendra Singh Pal, learned Authorized Representative appeared for the respondent. 3.1 The learned Counsel submitted that the appellant were under the bonafide belief that they were providing exempted service and hence the same was not required to be shown in the ST3 return. The department circular No. 1083/2017-X clearly states that all evidence in the form of documents, statements, and material evidence relied during the course of inquiry and investigation should be organized serially in a manner so as to establish charges against the appellant. The allegation in the SCN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sake of ready reference, we reproduce below para 4 of final order of this Tribunal in the case of Umesh Tilak Yadav reported at [2024] 159 taxmann.com 336 - CESTAT MUMBAI:- "4. We have carefully gone through the record of the case and submissions made. The demand was raised invoking the provisions of sub-section (1) of Section 73 of Finance Act, 1994. The said provision of Finance Act empowers Revenue for recovery of service tax which has not been levied or which has not been paid or which has not been short levied or which has not been short paid or which has been erroneously refunded. Therefore, the first step for Revenue is to establish that a specific amount to be demanded through show cause notice by invoking the said provision is service tax either not paid or short paid or not levied or short levied. Therefore, it is essential to establish that the value on which such service tax is calculated is the value under Section 67 and the same is derived from the consideration received by the appellant out of the activity which has to satisfy definition of service under sub-section (44) of Section 65B of Finance Act, 1994. Such type of examination of the facts and arriving at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 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. This Tribunal has time and again held as follows:- a) In the case of Lord Krishna Real Infra Pvt. Ltd. [2019 (2) TMI 1563 - CESTAT ALLAHABAD], it was held as follows:- "Further, we find 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. We find that Order of this Tribunal in the case of Sharma Fabricators Pvt. Ltd. (supra) is squarely applicable in the present case. We, therefore, hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two. We note that Revenue cannot raise the demand on the basis of such difference without examining the reasons for said difference and without establishing that the entire amount received by the appellant as reflected in said returns in the Form 26AS being consideration for services provided and without examining whether the difference was because of any exemption or abatement, since it is not legal to presume that the entire differential amount was on account of consideration for providing services. We, therefore, do not find the said show cause notice to be sustainable. In view of the same, we set aside the impugned order and allow the appeal." 6. We, therefore, hold that the present show cause notice is totally presumptive. Therefore, we do not find any 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, we set them aside for the reason that the show cause notice is not sustainable. We, however, do not interfere in the dropping of the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-sustainability of demand purely on the basis of difference between ST- 3 return and Income Tax returns of any other period, without any further examination to establish that the difference is on account of consideration received towards discharge of services, the following order is passed. THE ORDER 9. The appeal is dismissed and the order passed by the Commissioner in Order-in-Original No. 45/SN/COMMR-AuditIII/CGST&CEX/2021 vide order dated 30.03.2021 is hereby confirmed." Further, we also note that the final order of this Tribunal in the case of Sharma Fabricators & Erectors Pvt. Ltd. reported at 2017 (7) TMI 168 - CESTAT Allahabad was affirmed by Hon'ble Allahabad High Court through its order reported at 2019 (22) GSTL J166 (All.). 8. This Tribunal has held in the above stated case of Sharma Fabricators & Erectors Pvt. Ltd. that the charges in show cause notice have to be on the basis of books of account and records maintained by the assessee and other admissible evidence. The said decision of this Tribunal has been affirmed by Hon'ble Allahabad High Court. We note that in the present case the charges were framed in the show cause notice for arriving at taxable valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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