The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) directed to submit relevant documents in the matter concerning exemption under threshold limit of exemption for small scale service providers.
Therefore, on the basis of the data received from the income tax, show cause notice dated 24.04.2018 was issued to the appellant for recovery of service tax of Rs.5,30,000/- under proviso to Section 73(1) of the Finance Act along with interest under Section 75 and penalty under Section 78 and 7C of Service Tax Rules, 1994. No reply was submitted by the appellant to the show cause notice.
The counsel for the appellant submitted that the appellant had adopted for Voluntary Compliance Encouragement Scheme, 2013 ( VCES ) and therefore no demand could be raised for the period covered under VCES, i.e. April 2012 to December 2012. He relied on the provisions of section 108 of the Scheme to say that no demand can be raised pertaining to the said period. Also in terms of Section 111 of the Scheme the show cause notice is beyond the period of one year as specified therein and hence is barred by limitation.
The counsel also submitted that since they are exempted due to the threshold limit exemption for small scale service providers, no service tax is leviable. The learned Counsel has also put forward the argument that the services provided by the appellant, if taken together with the supply of goods, they are classifiable under works contract services where the liability to pay 50% of service tax under reverse charge was with service receiver, JVVNL in terms of Notification No. 30/2012– ST dated 20.06.2012. He also challenged the invocation of the extended period of limitation and the penalty.
The Authorized Representative for the Revenue submitted that the onus to prove that he is entitled to the benefit of the VCES Scheme was on the appellant and though he produced VCES-1 which is the initial application, but he failed to produce the VCES-2 and VCES-3 which is the acceptance by the department and discharge certificate being the most important document of proof and in the absence thereof the appellant is not entitle to seek any relief there under.
A Single Member Bench of Binu Tamta, Judicial Member observed that “Normally, the present appeal needs to be rejected considering the conduct of the appellant in not submitting the required documents at any stage, however with all fairness and in the interest of justice, I feel that an opportunity to produce all the relevant documents in support of the submissions made, needs to be granted to the appellant.”
“The appellant is once again directed to produce the VCES-2 and VCES-3 as the burden of proof is on the appellant. The appellant may also produce the documents in support of his submissions that he is exempted under the threshold limit of exemption for small scale service providers and that the services rendered by them are classifiable as ‘works contract services’ where discharge of 50% of service tax liability under reverse charge by JVVNL is in consonance with the notification” the Tribunal noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
