Custom, Excise & Service Tax Tribunal
M/S Fox Information Technology ... vs Cgst Ghaziabad on 6 May, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
Service Tax Appeal No.70105 of 2024
(Arising out of Order-In-Appeal No.GZB-EXCUS-000-APPL-64-23-24, dated -
27/06/2023 passed by Commissioner (Appeals) CGST, Meerut)
M/s Fox Information Technology Consulting Services Pvt.
Ltd. .....Appellant
(House No.-364, Neeti Khand-I,
Indirapuram,Ghaziabad, UP-201010)
VERSUS
Commissioner, Central Goods & Service Tax, Ghaziabad
....Respondent
(C.G.O. Complex-II, Kamla Nehru Nagar,
Near Hapur Chungi, Ghaziabad, U.P.-201002)
APPEARANCE:
None for the Appellant
Smt. Chitra Srivastava, Authorized Representative for the Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.-70302/2025
DATE OF HEARING : 06.05.2025
DATE OF DECISION : 06.05.2025
SANJIV SRIVASTAVA:
This appeal is directed against the Order-In-Appeal
No.GZB-EXCUS-000-APPL-64-23-24, dated -27/06/2023 passed
by Commissioner (Appeals) CGST, Meerut. By the impugned
order following has been held:-
"Accordingly, in light of my findings, as above, I reject the
subject appeal [Appeal No. 64-ST/APPL-MRT/GZB/2022-23
dated 29.06.2022] filed by M/s. Fox Information Technology
Consulting Services Private Limited, House No. 364, Neeti
Khand-1, Indirapuram, Ghaziabad, Uttar Pradesh -201010
and consequently, uphold the Order-in-Original No.
9/AC/STAX/CGST/D-VI/GZB/2022-23 dated 29.04.2022
2 Service Tax Appeal No.70105 of 2024
passed by the Assistant Commissioner, CGST, Division-VI,
Ghaziabad."
1.2 By the Order-In-Original dated 29.04.2022 following has
been held:-
ORDER
(i) I confirm the demand of Rs. 2,78,615/-(Incl. Cesses) (Rupees Two Lakh Seventy Eight Thousand Six Hundred Fifteen Only) proposed under section 73 (1) of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017.
(ii) I confirm the interest on (i) above at the applicable rate
(s) under Section 75 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017.
(iii) I also impose an equivalent penalty of Rs. 2,78,615/- (Rupees Two Lakh Seventy Eight Thousand Six Hundred Fifteen Only) as provided under section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. I gave an option to pay the penalty @25% of such service tax, if the same has been paid within the period of 30 days of the date of service of the order as provided under the proviso to Section 78 (1)(ii) of the Finance Act, 1994.
(iv) I impose the penalty of Rs. 10,000/- (Rs. Ten Thousand Only) under section 77 (1) (c) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017.
(v) I drop the late fee under section 70 of the Finance Act, 1994 and rule 7C read with Section 174 of CGST Act, 2017.
2.1 The Appellant is registered with Service Tax Department having Service Tax Registration No. AACCF3038JSD001. They were providing taxable Services of Interior Decoration Designer Services which fall under the ambit of section 65 (B) 44 of Finance Act, 1994.
2.2 On the basis of third party data receive from Income Tax Department for the Financial Year 2016-17 and the fact that Appellant had not filed any ST-3 Returns during 2016-17 Revenue was of the view that Appellant had short paid the service tax as detailed in the table below:-
3 Service Tax Appeal No.70105 of 2024 Period Total Value Total Gross Sale of Value Value Higher Value for TDS Value Services Difference Difference (Value (including provided (Income in ITR & in TDS & Difference in Under (Service Tax Tax Return) STR STR ITR & STR) or 194C, Return) (Value 194H, Difference in 1941, 194J) TDS & STR) (Value in Rupees) 2016- 1,09,17,685 90,60,250 93,65,805 3,05,555 18,57,435 18,57,435 17 Period Differential Value of Total Applicable rate of Total differential amount of Taxable Services service tax (include. Service Tax payable was not accounted cesses) for in the ST-3 returns (Value in Rupees) 2016-17 18,57,435/- 15% 2,78,615/-
2.3 The Show Cause Notice dated 18.10.2021 was issued to the Appellant asking them to show cause as to why:-
"(i) Service Tax amounting to Rs. 2,78,615/- (Incl. Cesses) (Rupees Two Lakh Seventy Eight Thousand Six Hundred Fifteen Only) so deliberatively and willfully short paid by them during the period from April, 2016 to March, 2017 should not be demanded and recovered from them under proviso to Section 73 (1) of the Finance Act, 1994;
(ii) Interest, on the above amount of Service Tax, should not be demanded and recovered from them under the provisions of Section 75 of the Finance Act, 1994;
(iii) Penalty should not be imposed upon them under the provisions of Section 78 of Finance Act 1994;
(iv) Penalty should not be imposed upon them under Section 77(1)(c) of Finance Act 1994.
(v) Late fee should not be imposed upon them Section 70 of the Finance Act, 1994 read with Rule 7C of Service Tax Rule, 1994 read with Section 174 of CGST Act 2017 for late filing/Non-
filing of ST-3 for the F.Y. 2016-17."
2.4 The Show Cause Notice has been adjudicated as per the Order-In-Original referred in Para 1.2 above.
2.5 Aggrieved, Appellant has filed the appeal before the Commissioner (Appeals) which has been dismissed as per the impugned order. Hence the present appeal.
4 Service Tax Appeal No.70105 of 2024 3.1 Heard learned Departmental Representative for the Revenue who has reiterated the findings recorded in the impugned order.
4.1 I have considered the impugned order alongwith the submissions made in the appeal memo.
4.2 The Appellant had stated as follows:-
It is submitted that Ld. Appellate authority in para 4.6 of the impugned Order-In-Appeal dated 27.06.2023 that given the finding that there is no estoppel in taxation matters and earlier demand was raised in respect of difference in value of services mentioned in Profit and Loss Account and ST-3 returns filed for the period 2016-17 vide SCN dated 13.02.2019. However, the present SCN dated 18.10.2021 was issued on the basis of difference in value of services between 26AS and Service Tax Return. Further, it not the case that the Appellant has provided relevant form 26AS based on which the subject demand has been raised to the auditing officers and the auditing the officers had failed to raise the subject issue despite the availability of the said form 26AS.
The above finding of Ld. Appellate authority is wrong and perverse because of the following reasons:
a) It is submitted that form 26AS now where states/contains the value of services provided. Hence, Ld. Appellate authority finding that present SCN dated 18.10.2021 was issued on the basis of difference in value of services between 26AS and Service Tax Return is false on the face of 26AS statement.
b) Without prejudice to above, the Ld. Appellate authority has failed to understand that dispute is regarding value of services provided by the Appellant during the period 2016-
17. It is submitted that O.I.O no. 11/Assistant Commissioner/CGST/Division-VI/Ghaziabad/2019-20 dated 30.09.2019, department has accepted that value of services provided by the Appellant during the period 2016-17 according to Profit and Loss Account. Therefore, it is not open to the department to again allege that value of services provided by the Appellant during the period 2016-17 is as per form 26AS because there is no power of review of earlier order passed is available under the Finance Act. 1994.
c) That the Ld. Appellate authority has given the finding it not the case that the Appellant has provided relevant form 26AS based on which the subject demand has been raised to 5 Service Tax Appeal No.70105 of 2024 the auditing officers and the auditing the officers had failed to raise the subject issue despite the availability of the said form 26AS for which it is submitted that form 26AS is neither the document of the Appellant nor prepared by the Appellant. Further, 26AS is public document, therefore, at the time of audit of the records of the Appellant, auditing officers must have considered the same.
In view of the above submissions, there is no authority under Finance Act, 1994 to review the earlier order in original dated 30.09.2019 whereas Ld. Appellate authority wrongly held that department can review its earlier order in original dated 30.09.2019. Hence, impugned Order-in- Appeal dated 27.06.2023 is bad under the law and liable to be set aside.
4.3 I find that the issue with regards to the value of the taxable services provide by the Appellant was the subject matter of the Order-In-Original dated 13.09.2019 and the Show Cause Notice was issued after taking note of the difference in the value of the taxable series provided as per the profit and loss account and ST-3 Returns. Para 5 of the Show Cause Notice is whereby such determination is done and the same is reproduced below for ready reference:-
Year Value of Service mentioned Difference ST@ Tax (Rs.) P & L A/c. ST-3 Return 2013-14 35,120/- 25,800/- 9,320/- 13.36 1,152/-
% 2016-17 93,65,805/- 90,60,250/- 3,05,555/- 15% 45,833/-
46,985/-
3.3 As per the above table it is observed that for the period 2016-17 the value as per profit and loss account is compared alongwith the value of ST-3 Return and it was found that there was a difference of Rs.3,05,555/- on which service tax demand of Rs.45,985/- was made and was dropped by the Adjudicating Authority observing as under:-
"16. Now I take up the second issue of short payment of service of Rs.46,985/- as alleged in the SCN that on reconciliation of the value of service as mentioned in the ST- 3 returns vis a- vis profit & Loss accounts, it was observed that there was a difference of value of Rs.9,320/- and 6 Service Tax Appeal No.70105 of 2024 Rs.3,05,5557- respectively during 2013-14 and 2016-17 on which service tax of Rs.1,152/- and Rs.45,833/ respectively was short paid by them. In this regards I find that the party in their defence reply has submitted that the said amount actually represents the exempted service provided to SEZs and also produced relevant invoices. On perusal of invoice no. 3DT0044 dated 10.11.2016 for amount of Rs.3,01,055/- and an invoice No.3DT0085 dated 23.01.2017 for Rs 4500/- respectively issued to EMC Software and Service India Pvt Ltd 'SEZI, Bangalore and NSE Infotech Service Ltd, BKC, Mumbai, respectively on which no service tax has been charged. The total of both the invoices comes top Rs.3,05,555/- equal to the alleged differential amount during 2016-17.
In view of above, I therefore hold that no service tax is payable on the amount of Rs.3,05,555/-for the F.Y 2061-7, as the amount is pertained to the exempted service provided to the SEZ units and moreover they have also not charged any service tax. However, for the differential amount of 9,320/- for the F.Y 2013-14 the party has not submitted any documentary evidences in their support. I therefore hold that the demand of Rs.45,833/- involved on differential of Rs.3,05,555/-during 2016-17 is liable to be dropped and S.Tax of Rs.1152/- involved on differential amount of Rs.9320/- during 2013-14 is liable to be paid by the party along with applicable interest."
3.4 As the issue with regards to the valuation of taxable service is provided by the Appellant by comparing profit and loss account has already been subject matter of the Order-in-Original dated 13.09.2019. I also find that the value of Rs 93,65,805/- which was reflected in the profit and loss account is same as value reflected in income tax return of the appellant for the relevant period (refer column 4 of table in para 2.2 of the order in original), I do not see any merits in the subsequent show cause notice issued by invoking the extended period of limitation against the Appellant. I also observe that it is not even the case of the revenue that income tax return was modified by the income tax authority on the basis of the figures reflected in 26AS of the Appellant. Further, I also observe that once the demand has been made for the same period and for the same issue and subsequent Show Cause Notice issued cannot be justified for the 7 Service Tax Appeal No.70105 of 2024 same reason without showing that some new facts have come into light.
3.5 In my view the second Show Cause Notice issued by invoking the extended period of limitation has to fail as Revenue could have completely investigated the matter while issuing the first Show Cause Notice. The Appellant cannot be held guilty for suppression of facts for failure on part of the Revenue to cause investigation. Accordingly, I do not find any merits in the impugned order and the same is set aside.
4.0 Appeal is allowed.
(Dictated & pronounced in open court) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal