The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the show cause notice (SCN) issued on the consideration of Contradictory statements in SCN regarding declaration in ST-3 Returns.
The appellant, M/s. Maheshwari Transport, was issued with a show cause notice wherein it was stated that there was a mismatch in values declared in Form 26AS filed with Income Tax and the values declared in Service Tax Returns for the financial years 2015-16 and 2016-17. It was further stated in the said show cause notice that in spite of various letters and emails, the appellant did not submit any record to the authorities for examination for issue of the said show cause notice.
The said show cause notice was adjudicated through the impugned order-in-original. The original authority has scrutinized the record submitted by the appellant during the hearing and after giving 70% abatement in respect of transportation charges received from individual and proprietorship concerns, and confirmed the demand of service tax of Rs.55,96,593/- and dropped the remaining demand and ordered to pay interest and imposed penalty of equal amount under Section 78 of Finance Act, 1994.
The counsel for the appellant submitted that the original authority has not considered the submissions made by the appellant in reply to the show cause notice and the said submissions were dismissed by the original authority without giving any proper reasoning. He has further submitted that the demand cannot sustain merely by comparing the figures of balance sheet and profit and loss account with ST-3 returns and Form 26AS in the absence of any evidence establishing that the income is for provision of taxable service.
Holding that the show cause notice is not sustainable in law a Two-Member Bench comprising Anil G. Shakkarwar, Member (Technical) and Dr. Suvendu Kumar Pati, Member (Judicial) observed that “It is stated that the appellant has not filed service tax returns for the period from October 2015 to June 2017 and at the same time in para 2 of the show cause notice, it is stated that there was mismatch in the values declared in ST-3 returns and in the Income Tax Returns for financial years 2015-16 and 2016-17. We observe that the above two statements in the said show cause notice are contradictory to each other.”
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