Custom, Excise & Service Tax Tribunal
P K Roy vs Durgapur on 4 July, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 75916 of 2016
(Arising out of Order-in-Original No. 77/Commr/DGP/ST/15-16 dated 26.02.2016
passed by the Commissioner of Central Excise, Service Tax & Customs Durgapur
Commissionerate Satyajit Roy Sarani, City Centre, Durgapur-713216 01)
M/s. P. K. Roy : Appellant
37, Bagha Jatin Path,
Sail Co-op. Housing, City Centre,
Durgapur-16, Dist. Burdwan,WB
VERSUS
Commissioner of Central Excise, Durgapur : Respondent
Commissionerate, Satyajit Roy Sarani, City Centre, Durgapur-713216 01 APPEARANCE:
Shri S. P. Siddhanta, Consultant for the Appellant Shri D. Sue, Authorized Representative for the Respondent CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.76699/2025 DATE OF HEARING : 18.06.2025 DATE OF PRONOUNCEMENT: 04.07.2025 Order: [PER SHRI K. ANPAZHAKAN] The instant Appeal has been filed by M/s. P.K. Roy (herein after 'the Appellant'), a proprietorship concern, against Order- In- Original No. 77/COMMR/DGP/ST/15-16 dated 26.02.2016 passed by the Ld. Commissioner who confirmed the service tax of Rs. 67,93,363/ including cesses and dropped the demand of service tax of Rs. 8,04,461/ including cesses, out of the total demand of service tax of Rs.Page 2 of 21
Appeal No.: ST/75916/2016-DB 75,97,824/ including cesses. He has also imposed penalty of Rs. 67,93,363/ under section 78 of the said Act and Rs. 1,000/ under section 77 of the said Act. He has also imposed penalty @ Rs. 200/ per day for failure to pay service tax starting from the first day after the due date till 17.04.2006 and @ Rs. 200/ per day or @2% of such service tax per month from 18.04.2006 to 09.05.2008 under section 76 of the said Act, on the basis of findings recorded in the order.
2. Earlier the Ld. Commissioner vide his Order - In - Original No. 24/ Commr./BOL/2011 dated 25.03.11. confirmed the demand of service Tax, including ceases totally amounting to Rs.75,97,824/- along with interest and penalty. On appeal, CESTAT, Kolkata vide its ORDER NO. FO/A/71020/2013 dated 20.08.2013 remanded the case to the original authority for re-determination of service tax liabilities after examination of all evidences. In the Denovo adjudication, the Ld. Commissioner has passed the impugned order dated 26.02.2016. Aggrieved against the said order, the appellant has filed this appeal.
3. The Appellant submits that they took registration on 19.04.2007 for 'Construction Service in respect of Commercial or Industrial Buildings and Civil Structures'. The instant demand notice has been issued on 20.04.2010 for the period from 02.11.2004 to 2008-09. As proprietorship concern, he was required to discharge service tax liability, if any, for the period ending 31.03.2005 within 31.03.2005.
Page 3 of 21Appeal No.: ST/75916/2016-DB Under section 73 of the said Act, even it is presumed that the service tax was not paid intentionally by way of suppression of fact, which was required to be paid by 31.03.2005, the demand notice was required to be served within five years from the relevant date. In his case, the relevant date is the date on which the service tax is to be paid. During the period up to 31.03.2005, he was not registered and so question of filing of return did not arise in his case. Even latter on, he has not filed any return for the said period and hence liability of payment date is the relevant date, which has not been considered while raising the demand and even when the first Order-In-Original was passed. He requested to consider the same to determine the service tax liability under section 73(2) of the Finance Act 1994.
3.1. When the Ld. Adjudicating authority took up the case for denovo adjudication as per the direction of the Tribunal, he expected that the notice issued earlier would be relooked into to classify the services provided by him inasmuch the earlier demand notice was issued on merely going by the 3 CD and Party Ledger submitted by him to arrive at the amount received for different services. In para 8 and 9 of the 'Discussion and Findings' of the impugned order, the Ld. Commissioner has categorically admitted the nature and character of the services, but failed to classify the services and allow abatement/exemption to the said services. For demand of service tax, first of all the nature of services rendered has to be considered, thereafter it has to be examined whether the Page 4 of 21 Appeal No.: ST/75916/2016-DB service is covered by definition of services in the said Act and classified under a particular service category, thereafter it has to be seen what is the rate of tax and consideration received and the tax amount has to be calculated. From the impugned order, it is evident that the Ld. Adjudicating authority has not classified the service rendered by the appellant. Accordingly, the appellant submitted that the demand of service tax confirmed without classifying the service rendered under a particular category of service, is not sustainable. In support of this view, the appellant relied on the case law of GSP INFRATECH DEVELOPMENT LTD. v. CCE. CUS. & S.T., BELGAUM reported in 2015 (39) S.T.R. 327 (Tri. - Bang.).
3.2. The appellant submits that the demand notice is the foundation of recovery proceedings of the service tax not paid or short paid. Until and unless the tax liability for particular service is indicated in the impugned demand notice, the opportunity to refute the same is not available to him and so the instant proceedings is not a valid one. In support of this view, he relied on the decision of the Hon'ble Apex Court in the case of Metal Forgings v. U.O.I. reported in 2002(146) E.L.T. 241(S.C.). The above judgment has been relied upon by the CESTAT, Principal Bench, New Delhi in the case of Bharat Seats Ltd. vs. Commissioner of C. E., New Delhi reported in 2009 (242) E.L.T. 308 (Tri. - Del.) holding, inter alia, that show cause notice is foundations of any proceeding and categorical demonstration of allegations as to ingredients of law, is essential. The said judgment of the Page 5 of 21 Appeal No.: ST/75916/2016-DB Hon'ble Apex Court has been relied upon by the CESTAT, Principal Bench, New Delhi in the case of Jetlite(India) Ltd. vs. Commissioner of C. E., New Delhi reported in 2011 (21) S.T.R. 119 (Tri.
- Del.) holding, inter alia, merely based on registration certificate, one cannot conclude about the liability of service tax and merely because the firm is enrolled under Finance Act, 1994, it cannot be presumed that the firm is carrying out taxable services. The Revenue is to place material revealing activity of firm on rendering of services. It is clear that the authority who issued the impugned notice did not apply his mind to see the records and documents to allege nonpayment or short payment of service tax, rather he took the entire amount shown in 3CD and Party Ledger as the assessable value, irrespective of whether the said activities fall under taxable service or not.
3.3. The appellant submits that service tax cannot be charged on the turn over shown in the 3CD and Party Ledger and for that he relied on the decision in the case of Synergy Audio Visual Workshop P. Ltd. vs. Commr. of S.T., Bangalore[2008(10)S.T.R.578(Tri.-Bang.)], wherein it has been held that amount shown in the Income Tax Return or Balance Sheet not liable to service tax, without any further corroborative evidence.
3.4. The appellant submits that the investigation against him started on 26.06.2008 and the demand notice was issued after taking into accounts the records submitted and Page 6 of 21 Appeal No.: ST/75916/2016-DB statements made by him. In spite of knowing that he provided service to different Govt. Agencies including Indian Railways, WBSEB (West Bengal State Electricity Board), ADDA (Asansol - Durgapur Development Authority), DMC (Durgapur Municipal Corporation) , Bengal- Ambuja Housing Development Ltd ( A joint venture of the Govt. of W.B) etc. including few private clients, the authority who issued the notice has demanded service tax on the entire amount without allowing any exemption and abatement as applicable to construction service/work contract service denying him proper opportunity to defend the case.
3.5. The appellant submits that the copies of the work order, submitted him has been dealt in paras 5.1.1, 5.1.2, 5.2 , 5.2.1, 5.3.1, 5.3.2 and 5.3.3 of the impugned notice, but the author who issued the notice failed to classify the service and calculate the service tax , if any, payable after allowing the exemption and abatement.
3.6. A perusal of the Annexure to the notice clearly reveals that service recipients have deducted sales tax (WCT), which proves that the service provided falls under work contract service, which came into effect from 01.06.2007. Hence, there is no service tax liability on the said services for the period prior to 01.06.2007.
3.7. The appellant also pointed out the following discrepancies while computing the demand of service tax in the impugned Notice/Order:
Page 7 of 21Appeal No.: ST/75916/2016-DB
(a)the service tax liability to be calculated from 01.04.2005 to 31.05.2007 after allowing the benefit of abatement;
(b)from 01.06.2007, the service tax to be calculated @ 2% upto 29.02.2008 even payment received thereafter;
(c)from 01.03.2008, either calculate the service tax @ 4% or after allowing abatement under notification No. 1/2006;
(d)where the service has been provided to main contractor, no service tax be demanded; and
(e) particularly Work Order given by the Chief Engineer (Trans Proj.) of WBSEB bearing Memo No. TR PROJ/Belmuri/T-113/1077 dated 10.11.2005, placed in the Paper Book, Page 325 onwards, may be seen that the said job was provided related to transmission of electricity. Exemption notification No. 11/2010-S.T., dated 27-2-2010 was issued to allow full exemption of service tax on the taxable service provided to any person, by any other person for transmission of electricity. Further, full exemption to all taxable services relating to transmission of electricity till 26-2-2010 and distribution of electricity till 21-6-2010 was allowed under notification No. 45/2010-S.T., dated 20-7-2010. Thus, no service tax is payable on such services.
3.8. The service provided to Cosmic Ferro Alloys Pvt. Ltd., Neo Metaliks Ltd. and other companies who are engaged in manufacture of excisable goods are entitled to get CENVAT credit of service tax paid by him in view of the Page 8 of 21 Appeal No.: ST/75916/2016-DB definition of 'input service' under rule 2(l) of the CENVAT Credit Rules, 2004, as was in vogue during the material period (up to March, 2009). During the material period CENVAT credit of service tax paid in relation to setting up, modernization, renovation or repairs of a factory, was available. Hence the said companies would have paid service tax had the same been charged by him. Therefore, in such cases there cannot be any willful intention to suppress any taxable value to evade payment of service tax and so the demand on that account is not maintainable on the ground of revenue neutrality, as has been held by the CESTAT, WZB, Ahmedabad in the case of Reliance Industries Ltd. Vs. Commissioner of C. Ex., & Cus., Rajkot reported in 2009(244) E.L.T. 254. In case the consequence is revenue neutral, the demand for the extended period cannot be raised. The same view has been expressed in the case of Hindustan Lever Limited vs. Commissioner of Central Excise, Chandigarh reported in 2008(230)E.L.T. 447(Tri.-Del.) and in the case of Hindustan Zinc Limited vs. Commissioner of Central Excise, Jaipur-II reported in 2008(232)E.L.T. 687(Tri.-Del.). Also the Hon'ble CESTAT, South Zonal Bench, Bangalore in the case of P. R. Rolling Mills Pvt. Ltd. vs. Commissioner of Central Excise, Tirupati reported in 2010(249) E.L.T. 232, where in it has been held that extended period cannot be invoked in case of revenue neutrality and the same view has been expressed in the case of Sundram Fasteners Limited vs. Commissioner of Customs & Central Excise, Hyderabad-I reported Page 9 of 21 Appeal No.: ST/75916/2016-DB in 2009(237) E.L.T. 55(Tri.-Bang.). The Hon'ble Supreme Court in the case of Commissioner of Central Excise, Pune v. Coca-Cola India Pvt. Ltd. reported in 2007 (213) E.L.T. 490 (S.C.), held that in case revenue neutrality no demand is maintainable. Relying on the above decision of the Hon'ble Apex Court, the CESTAT, WZB, Mumbai Bench in the case of ROCHEM SEPARATION SYSTEMS (INDIA) P. LTD. Versus COMMR. OF S.T., MUMBAI-I reported in 2015 (39) S.T.R. 112 (Tri. - Mumbai) has also taken the same view.
3.9. The service provided to Railways, WBSEB (for power transmission), to Govt. Agencies like ADDA and DMC (for road and sewerage) are not taxable and so he requested to quantify the said services and allow him an opportunity to submit proper defence. So far as service provided to Govt. Agencies like ADDA and DMC (for road and sewerage), he submitted that those services are not taxable and he relied on the decision of the CESTAT, WZB, Mumbai in the case of LALIT CONSTRUCTIONS Versus COMMISSIONER OF CENTRAL EXCISE, RAIGAD reported in 2012 (27) S.T.R. 138 (Tri. - Mumbai), wherein it has been held that Civil Contractor engaged in activity of providing, lowering and laying of sewerage and water supply pipeline including construction of chambers, operation, maintenance and repair work to water supply distribution network, underground drainage work etc. to various Government bodies, such activities undertaken by the assessee are not covered under the category of Erection, Commissioning or Page 10 of 21 Appeal No.: ST/75916/2016-DB Installation Service under sections 65(39a) and 65(105)(zzd) of the said Act;
3.10. He has provided service as sub - contractor to main contractors, namely Voltas Limited, Luxmi Township, Thermax Limited, Jaypee Projects Limited and Techno Electric and Engineering Co. Ltd., which may be seen from the Work Orders submitted in 'Paper Book'. Firstly the service provided by the main contractors so far as related to Railways and sewerage work to ADDA is not taxable and so as sub - contractor, he is not liable to service tax. Secondly when the main contractors have paid service tax, wherever payable, as sub - contractor, he is not liable to service tax. The Central Board of Excise & Customs, New Delhi has already clarified vide circular no. B1/ 3/ 98 dated 07.10.1998 that sub-contractors are not required to pay service tax. After the issuance of circular no. 96/07/2007 dated 23.08.2007 by the CBEC, the sub-contractors were clarified to be service providers themselves and were liable to pay service tax separately on their part of value on the service rendered. Thus, prior to 23.08.2007 only the main contractor was liable to pay service tax and sub-contractors were not liable. Even after the said circular dated 23.08.2007, the service tax liability cannot be fastened on him, since the service tax on the entire project value, started prior to 23.08.2007, has been paid by the main contractors. In support of this view, he relied on the decision of the Tribunal, Kolkata in the case of NBCC Ltd. Vs. CCE, Patna as reported in 2011 (23) STR 593 (Tri-Kol), holding that no service Page 11 of 21 Appeal No.: ST/75916/2016-DB tax is payable by the sub-contractors, if the main contractor has paid the service tax liability on the entire value of work order.
3.11. The appellant submitted that as directed by CESTAT, Kolkata vide its Order No. FO/A/71020/2013 dated 20.08.2013 to produce all evidences, he has submitted all the documents in their written submissions. However, the Ld. Commissioner has passed the order without discussion of the above submission supported by case laws and thereby the order passed by him in cryptic manner is illegal, non speaking and without observance of principles of natural justice, which would be evident if the findings recorded in para 4.1 to 4.20 of the order is compared with the above submission, rendering the order is liable to be set aside. The Appellant relies on the decisions of CESTAT, Eastern Bench, Kolkata in the case of Eastern Steel & Allied Industries Vs. Commissioner of C. Ex, Kolkata-II [2008(224)E.L.T.158] setting aside the order passed without dealing the contentions and the order being not speaking and unreasoned .
3.12. The Ld. Commissioner has failed to consider the contentions made in the 'Write up' submitted at the time of hearing - except a portion of demand of service tax of Rs. 8,04,461/ including cesses on service related to Railways provided by the Appellant. He has not even allowed the same benefit when such service was provided to main contractor related to Railway - so the Appellant has no other alternative but to repeat the same contentions Page 12 of 21 Appeal No.: ST/75916/2016-DB supported by case laws for consideration of this Tribunal again.
3.13. The Ld. Commissioner has denied the benefit of exemption in case of service provided to WBSEB, which has been specifically allowed under notification No. 45/2010-S.T., dated 20- 7-2010, to exempt all taxable services relating to transmission and distribution of electricity provided by a person. The Ld. Commissioner in para 4.14 of the order has distinguished the above notification on the analogy that the work has no direct relation with the transmission and distribution of electricity. The WBSEB prior to bifurcation as WBSEB and WBSEDL, was engaged in generation, transmission and distribution of electricity and so there cannot be any doubt that all the work received by it were related to generation, transmission and distribution of electricity and hence such narrow interpretation to deny benefit of emption is an example of high revenue bias.
3.14. The appellant submits that the benefit available to main contractors has not been allowed to them as subcontractors rendering the same services, in spite of the fact that the dispute has already been decided by the Tribunal, Kolkata.
3.15. While demanding service tax, the benefit of abatement has been disallowed for the period from 01.10.2004 to 02.02.2006 by the Ld. Commissioner on the analogy that the Appellant fails to produce any evidence in support of purchase of any goods. The observation is surprising particularly in the Page 13 of 21 Appeal No.: ST/75916/2016-DB circumstances that in the 'Write up' submitted at the time of hearing, he submitted (i) all copies of the work order, (ii) he requested to give opportunity to explain on being asked after examination of work orders, (iii) that without prejudice to what has been submitted, he is ready to assist to arrive at any service tax liability, if there be any, with documentary proof in addition to the documents submitted and requested to allow such opportunity on specific issues so framed by the authority. The Ld. Commissioner has not allowed any opportunity after examination of the work orders to submit his defence. While denying the benefit of abatement, the Ld. Commissioner has failed to take note of the notification No. 15/2004-S.T., dated 10-9-2004, which provided eexemption of thirty-three per cent of the gross amount charged, when material is used for providing the said service.
3.16. The appellant submits that the demand of service tax has been raised in this case on the basis of Balance Sheets and records submitted by the Appellant. As there is no suppression of facts with intention to evade the tax established in this case, the demand confirmed by invoking extended period of limitation is not sustainable. In support of this, the appellant relies on the decision
(i) in the case of BLACKSTONE POLYMERS vs. COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II reported in 2014 (301) E.L.T. 657 (Tri. - Del.) Page 14 of 21 Appeal No.: ST/75916/2016-DB
(ii) the decision of the CESTAT, ERB, Kolkata in the case of M/s. Piyush Sharma Vs. Commissioner of CGST & CX, Patna-I
(iii) In view of the above submissions, the appellant prays for setting aside the demands of service tax confirmed in the impugned order and allow their appeal.
4. The Ld. A.R. reiterated the findings in the impugned order.
5. Heard both sides and perused the appeal documents.
6. We find that the same issue has come before this Tribunal earlier and this Tribunal has remanded the matter to the Ld. Adjudicating authority to pass a speaking order after giving an opportunity to the appellant to submit all the documents available with him. On the basis of direction of this Tribunal, the Ld. Commissioner has passed this Order - In - Original No. 24/ Commr./BOL/2011 dated 25.03.11. confirming the demand of service Tax demanding service tax including ceases totally amounting to Rs.75,97,824/- along with interest and penalty and dropped the demand of Rs. 8,04,461/ including cesses.
6.1. It is the submission of the appellant that while confirming the demand of service tax again vide the impugned order, the Ld. Adjudicating authority has failed to take note of the notification No. 15/2004-S.T., dated 10-9- 2004, which provided exemption of thirty-three per cent. of the gross amount charged, when material is used for providing the said service.
Page 15 of 21Appeal No.: ST/75916/2016-DB The documents submitted by the appellant indicate that they have utilised material while providing the services. Accordingly, we find that the appellant are eligible for the abatement as provided under the notification No. 15/2004- S.T., dated 10-9-2004.
6.2. From a perusal of the Annexure to the notice, we find that the service recipients have deducted sales tax (WCT), which proves that the service provided falls under work contract service, which came into effect from 01.06.2007. However, we find that there is no demand of service tax under the category go 'works contract' in the impugned order. Thus, we observe the demand of service tax on the said services some other category is not sustainable.
6.3. We observe that the services provided by the appellant to Railways, WBSEB (for power transmission), to Govt. Agencies like ADDA and DMC (for road and sewerage) are not liable to service tax. We find that this view has been held in the decision of the CESTAT, WZB, Mumbai in the case of LALIT CONSTRUCTIONS Versus COMMISSIONER OF CENTRAL EXCISE, RAIGAD reported in 2012 (27) S.T.R. 138 (Tri. - Mumbai), wherein it has been held that Civil Contractor engaged in activity of providing, lowering and laying of sewerage and water supply pipeline including construction of chambers, operation, maintenance and repair work to water supply distribution network, underground drainage work etc. to various Government bodies, such activities undertaken Page 16 of 21 Appeal No.: ST/75916/2016-DB by assessee not covered under the category of Erection, Commissioning or Installation Service under sections 65(39a) and 65(105)(zzd) of the said Act. However, we find that the Ld. Adjudicating authority allowed this exemption to only some work order and dropped the demand of Rs.8,04,461/- and no finding has been given in respect of the remaining services rendered in connection with Railways.
6.4. We observe that the Ld. Commissioner has denied the benefit of exemption in case of service provided to WBSEB. However, we find that exemption has been specifically allowed under notification No. 45/2010-S.T., dated 20- 7-2010, to all taxable services rendered relating to transmission and distribution of electricity provided by a person. We observe that the Ld. Commissioner in para 4.14 of the order has distinguished the above notification on the analogy that the work has no direct relation with the transmission and distribution of electricity. In this regard, we observe that the WBSEB prior to bifurcation as WBSEB and WBSEDL, was engaged in generation, transmission and distribution of electricity and so there cannot be any doubt that all the work received by it were related to generation, transmission and distribution of electricity and hence such narrow interpretation cannot be made to deny benefit of emption. Accordingly, we hold that the appellant are eligible for the said exemption to the services rendered in connection with transmission of electricity.
Page 17 of 21Appeal No.: ST/75916/2016-DB 6.5. We observe that the demand of service tax has been raised in this case on the basis of Balance Sheets and records submitted by the Appellant. We observe that the demand notice is the foundation of recovery proceedings of the service tax not paid or short paid. Until and unless the tax liability for particular service is indicated in the impugned demand notice, the opportunity to refute the same is not available to the appellant. In the instant case, we find that the show cause notice has not has not specifically demanded service tax under any particular category. The following chart shows the service tax liability of M/s. P K Roy during the period mentioned against the the rate of service tax changed from time to time:-
6.6. Thus, we hold that the instant proceedings initiated against the appellant without specifying the demand of service tax under a particular category of service is legally not sustainable.Page 18 of 21
Appeal No.: ST/75916/2016-DB 6.7. In support of this view, we rely on the decision of the apex Court in the case of GSP Infra Tech Development Ltd Vs CCE, CUS & ST, Belgaum reported in 2015(39) STR 327 Try (Bang). The relevant part of the above decision is reproduced below:
2. At the outset the learned counsel makes a preliminary objection that the demand has been confirmed without giving service wise breakup and based on the total amount received for the services rendered in their Ledger and Balance Sheet. On the last occasion when the matter was heard, the learned AR was given an opportunity to get a report as to whether the breakup is available and how this has happened.
Today when the matter was called, the report was shown to us wherein the learned Commissioner has stated that the offence case was registered by DGCEI, BRU and officers have not quantified Service Tax demand service wise and party wise. He has also stated that the quantification is on the basis of Balance Sheet and Ledger abstract on year-wise basis.
3. Unfortunately learned Commissioner has forgotten the fact that merely going by the Balance Sheet and Ledger figures to arrive at the service amount received is not correct. More so because many times we have found that Balance Sheet is prepared on accrual basis whereas Service Tax is levied on receipt basis. In any case for demand of Service Tax, first of all the nature of services rendered has to be considered, thereafter it has to be examined whether the service is covered by definition of services in the Finance Act, 1994 and classified under a particular service category, thereafter it has to be seen what is rate of tax and consideration received and the tax has to be calculated. This is the process to be followed for assessment of tax and in the absence of any assessment by the Page 19 of 21 Appeal No.: ST/75916/2016-DB assessee when the Commissioner proceeds for adjudication this process has to be followed. In the absence of such a process it would not be possible to apply any law and decide the matter. Therefore we find that the preliminary objection raised by the learned counsel is valid and therefore the matter is required to be remanded to the original authority at this stage itself. Accordingly the impugned order is set aside and the matter is remanded to the original adjudicating authority to proceed in accordance with law after giving reasonable opportunity to the appellant to present their case. The Commissioner may provide details service wise and party wise separately and the consideration received and the tax payable before proceeding further. Stay petition as well as appeal gets disposed of in the above manner.
6.8. We find that the same view has been taken by the Hobble apex Court in the case of Metal Forgings v. U.O.I. reported in 2002(146) E.L.T. 241(S.C.). The said judgment has been relied upon by the CESTAT, Principal Bench, New Delhi in the case of Bharat Seats Ltd. vs. Commissioner of C. E., New Delhi reported in 2009 (242) E.L.T. 308 (Tri. - Del.) holding, inter alia, that show cause notice is foundations of any proceeding and categorical demonstration of allegations as to ingredients of law, is essential. The said judgment of the Hon'ble Apex Court has been relied upon by the CESTAT, Principal Bench, New Delhi in the case of Jetlite(India) Ltd. vs. Commissioner of C. E., New Delhi reported in 2011 (21) S.T.R. 119 (Tri.
- Del.) holding, inter alia, merely based on registration certificate, one cannot conclude about liability of service tax and merely because Page 20 of 21 Appeal No.: ST/75916/2016-DB firm enrolled under Finance Act, 1994 presumption not raised that such firm carrying out relevant activities/services.
6.9. In view of the above, we observe that it is the primary duty of the Notice issuing authority to place material revealing activity of firm on rendering of services. It is clear that the authority who issued the impugned notice did not apply his mind to see the records and documents to allege nonpayment or short payment of service tax, rather he took the entire amount shown in 3CD and Party Ledger as the assessable value, irrespective of the nontaxable activities, exempted/abatement available and activities when the said activities do not fall under taxable service. We observe that service tax cannot be charged merely on the basis of the turn over shown in the 3CD and Party Ledger. This view has been held in the case of Synergy Audio Visual Workshop P. Ltd.
vs. Commr. of S.T., Bangalore[2008(10)S.T.R.578(Tri.-Bang.)], wherein it has been held that amount shown in the Income Tax Return or Balance Sheet not liable to service tax, without any further corroborative evidence.
6.10. As there is no suppression of facts with intention to evade the tax established in this case, the demand confirmed by invoking extended period of limitation is not sustainable. In support of this, the appellant relies on the decision
(i) in the case of BLACKSTONE POLYMERS vs. COMMISSIONER OF CENTRAL EXCISE, Page 21 of 21 Appeal No.: ST/75916/2016-DB JAIPUR-II reported in 2014 (301) E.L.T. 657 (Tri. - Del.)
(ii) the decision of the CESTAT, ERB, Kolkata in the case of M/s. Piyush Sharma Vs. Commissioner of CGST & CX, Patna-I 6.11. Thus, we hold the demand notice issued to the appellant is legally not valid. Hence, the impugned order confirming the notice on the basis of the invalid notice is not sustainable. AS the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise. Accordingly, the penalty imposed are set aside.
7. In view of the above findings, we set aside the demands of service tax including cesses, along with interest and penalties, confirmed in the impugned order and allow the appeal filed by the appellant with consequential relief, if any, as per law.
(Order Pronounced in Open court on 04.07.2025) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) rkp