The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax is not leviable merely on basis of figures reflected in statutory records.
Raghavendra Rao, the counsel appearing for the appellants submitted that the Appellant is engaged in training interested candidates in the art of movie making, which is exempt by S.No.8 of Mega Exemption Notification No. 25/2012 dt.20.06.2012; though the Commissioner (Appeals) has given relief on account of exempted turnover for Rs.9,85,322/-, he confirmed demand on turnover of Rs.26,64,021/-; the Appellant submitted that they have taken loans and cash deposits for personal use and the same were erroneously shown in the ITR; the lower authority passed the orders without considering the explanation.
It was also submitted that though the figure indicated in Income Tax Returns and ST3 Returns are tallying, the Department has raised demand on the basis of statement 26AS; the submission that the statement in 26AS include the payments received for the services rendered in the previous year were ignored by the Adjudicating Authority as well as the Appellate Authority.
The AR for Revenue in respect of the appeal reiterated the findings of the Impugned Order and submits that the Appellants could not explain the cash deposits so claimed by them in spite of giving them a number of opportunities. No proof of acceptance of the revised ITR filed by them has also been given.
It was also submitted that the appellants could not explain the stand taken by them regarding the amounts reflected in 26AS vis-a-vis, the service tax paid in the previous years and no proof was also submitted.
A Single Member Bench comprising P Anjani Kumar, Technical Member observed that “It is clear that the cases are made on the basis of third party data i.e., amounts reflected in Income Tax Returns and in Form 26AS. Revenue takes the stand that in the Negative List regime, Department is not obliged to prove the provision of a particular service to demand service tax and further, the Appellants could not explain that the difference satisfactorily. I find that this is not the correct approach; exigibility to service tax depends on the service provider, service rendered, service recipient and the consideration thereof.”
“Unless these four elements have been connected logically, demand of service tax cannot be confirmed merely on the basis of figures reflected in other statutory records. Be it pre or post-Negative List regime, the Department is under obligation to prove that the Appellants have rendered such and such service and to such and such persons and that the consideration was received towards the rendering of such service. Without doing the same, demand merely on the basis of figures does not survive” the Tribunal noted.
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