The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) set aside the demand of Service Tax solely based on form 26 AS provided by the income tax department.
The Appellant, Shri. Rajeshwar Prasad Choudhari challenged the impugned order passed by the Commissioner (Appeals), CGST & CX Ranchi, wherein the Appellate Authority has upheld the Order-in-Original. In the Order-in-Original, the Adjudicating authority has confirmed the service tax demand, including Cess, of Rs. 6,98,811/-along with interest and an equal amount of tax as a penalty.
Penalty has also been imposed under Sections 77(1) (a),(b), (c) and 77(2) of the Finance Act, 1994. The Appellant submitted that the demand in the instant case is barred by limitation. They contended that the entire proceedings have been carried out based on information available in Form 26AS of the Income Tax department. Since these figures are included in the Profit/Loss Account in the Balance Sheet, which is a public document and so there can be no suppression.
The Department has not adduced any positive evidence to show malafide intention or mens rea for evasion of Service Tax, under any particular head of Taxable Services. Since none of the ingredients necessary for invoking an extended period of limitation as visualized under proviso to Sec. 73(1) of the Act exists in this case, the demand confirmed in the impugned order by invoking an extended period of limitation is not sustainable.
The Appellant submitted that the demand of Service Tax cannot be made solely based on Form 26AS Statement provided by the Income Tax department. The appellant submitted in the case of Luit Developers Pvt. Ltd. vs. Commissioner, it has been held that the figures reflected in Form 26AS cannot be used to determine Service Tax liability unless there is evidence showing that it was due to a taxable service.
The adjudicating authority has rightly confirmed the demand, which has been upheld by the Commissioner (Appeals) in the impugned order. Thus, he prayed to reject the appeal filed by the Appellant.
The department has not conducted any verification to ascertain whether the amount mentioned in Form 26AS was received on account of providing any taxable service by the Appellant.
A single member bench of Mr K Anpazhakan Member (Technical) observed that the Department has not adduced any positive evidence to show malafide intention or mens rea for evasion of Service Tax on the part of the Appellant. The CESTAT held that an extended period cannot be invoked in this case to demand service tax on the Appellant.
Since the entire demand has been raised beyond the normal period of limitation, the Tribunal set aside the demand on the ground of limitation.
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