Issuance of SCN Merely Based on Audit Objection without Verifying Documents: CESTAT quashes Order [Read Order]
![Issuance of SCN Merely Based on Audit Objection without Verifying Documents: CESTAT quashes Order [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/07/Issuance-of-SCN-Merely-Based-on-Audit-Objection-without-Verifying-Documents-Issuance-of-SCN-Documents-CESTAT-Quashes-Order-CESTAT-Taxscan.jpg "Issuance of SCN Merely Based on Audit Objection without Verifying Documents: CESTAT quashes Order [Read Order]")
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the original adjudicating authority by issuing a show-cause notice merely based on audit objection and without verifying valid documents. Graphisads Pvt. Ltd, the appellant assessee appealed against the order passed by the original adjudicating authority for imposing...
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the order passed by the original adjudicating authority by issuing a show-cause notice merely based on audit objection and without verifying valid documents.
Graphisads Pvt. Ltd, the appellant assessee appealed against the order passed by the original adjudicating authority for imposing the penalty under Section 78 of the Finance Act, 1994.
Devesh Tripathi, Anjali Gupta, and Rajatdeep Sharma, the counsels for the assessee contended that the show cause notice had been issued merely based on audit objection without verifying the factual position and without seeking any clarification from the assessee.
It was further submitted that the adjudicating authority completely ignored the details shown in the balance sheet under the head ‘expenditure’ and ‘sundry debtors’ and there had been a proper co-relation of all details and no need to issue the show cause notice.
Prashant Kumar Singh, the counsel for the department relied on the decisions made by the original adjudicating authority and contended that the assessee had not paid service tax and education cess at applicable rates throughout the referred period.
Also submitted is that the assessee appears to have short levied and short paid service tax and education cess.
The bench observed that the extended period has wrongly been invoked by the department while issuing the show cause notice and the burden of proving the malafide lies with the department and there was nothing on record that displays any wilful default on the part of the assessee.
The two-member bench comprising Rachna Gupta (Judicial) and Hemambika R. Priya (Technical) quashed the penalty imposed by the original adjudicating authority while allowing the appeal filed by the assessee.
To Read the full text of the Order CLICK HERE
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