The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench quashed service tax demand as the difference in receipts towards exempted services was shown in ST-3 return.
The service tax demand related to the alleged differences and figures declared in ST-3 vis-a-vis actual receipts. The counsel for the appellant argued that no tax liability can be ascertained without first ascertaining whether taxable services was provided which require the appellant to pay service tax thereon.
The counsel further argued that merely because the value of taxable service shown in the ST-3 Returns did not correspond in the amount shown in the ledger maintained by the appellant cannot be led to the conclusion that taxable services was rendered and, no taxes was paid on such services and relied in the case of UOI vs Garware Nylons Ltd, which held that burden of proof is on department to establish if any receipt is taxable or otherwise.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The appellant has given detailed reconciliation of the difference in the figures in ST-3 vis-a-vis actual receipt. The appellant has claimed that the variation is on account of inclusion of amount in service tax gross value/ VAT amount/booking of TDS/ declaration of receipt entry. We do not find any mention of these facts in the impugned order nor does the impugned order contain any examination of this data.”
“We are not even aware if this data was submitted before the original adjudicating authority. In view of above, we set aside this demand and remand the matter back to original adjudicating authority to examine the reconciliation produced by the appellant, in these appeal papers decide afresh” the Tribunal concluded.
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