Custom, Excise & Service Tax Tribunal
M/S Vidyut Majdoor Kalyan Samiti vs Cgst Lucknow on 15 January, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No.II
Service Tax Appeal No.70721 of 2025
(Arising out of Order-in-Appeal No.689-ST/APPL/LKO/2024 dated 30/10/2024
passed by Commissioner (Appeals) Customs, Central Excise & CGST,
Lucknow)
M/s Vidyut Majdoor Kalyan Samiti, ....Appellant
(Lala Teli bajariya,
Mal Godam Road, Shahjahanpur)
VERSUS
Commissioner of Central Excise &
CGST, Lucknow ....Respondent
(7A-Ashok Marg, Hazaratganj, Lucknow) APPEARANCE:
Shri Rajshekhar Saxena, Advocate for the Appellant Smt Chitra Srivastava, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70018/2026 DATE OF HEARING : 18 December, 2025 DATE OF PRONOUNCEMENT : 15 January, 2026 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.689- ST/APPL/LKO/2024 dated 30/10/2024 passed by Commissioner (Appeals) Customs, Central Excise & CGST, Lucknow. By the impugned order, Order-in-Original No.115/AC/ST/STP/2023 dated 24.05.2023 holding as follows has been upheld:-
"ORDER
(i) I confirm the demand of Service Tax amounting toRs.7,03,884/- (Rupees Seven lakhs Three Thousand Eight Hundred and Eighty Four Only) Including various cess as applicable demanded from them under proviso to Section 73(1) of the Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 Service Tax Appeal No.70712 of 2025 2
(ii) I confirm the demand of due interest on the amount of Service Tax mentioned at (i) above demanded from them under Section 75 of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017.
(iii) I impose an equal amount of penalty equivalent to the amount of tax as confirmed under Section 73(1) of the Act as above, under Section 78 of the Finance Act 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for failure to pay service tax & suppressing the facts and value of taxable service with intent to evade payment of service tax. Provided that the penalty shall be reduced to 25%., if the payment of due tax is made within 30 days of receipt of this Order.
(iv) I impose penalty of Rs.10,000/-(Rupees Ten Thousand) upon them under Section 77(1)(b) of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not maintaining the proper records.
(v) I impose penalty of Rs.10,000/- (Rupees Ten Thousand) upon them under Section 77(1)(c) of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not furnishing documents.
(vi) I impose penalty of Rs.10,000/- (Rupees Ten Thousand) under Section 77 1 (d) of the Finance Act 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not depositing the short paid/due Service Tax Electronically.
(vii) I impose penalty of Rs.10,000/- (Rupees Ten Thousand) upon them under Section 77(2) of the Finance Act, 1994 read with Section 70 of the Finance Act, 1994 readwith Rule 7 of the Service. Tax rules 1994 read with Section 142, Section 173, and Section 174 of the CGST Act 2017 in as much as they failed to file periodical returns Service Tax Appeal No.70712 of 2025 3 assessing the due Tax on Services provided by the prescribed Date."
2.1 Appellant having PAN No.ABTFS4658J was not registered with the Service Tax Department. On the basis of information received from Income Tax Department, it was observed that during the financial year 2016-17 appellant has received amount as per table below:-
Period Receipt (26AS) Receipt (ITR) Difference (ITR-26 AS) 2016-17 12,23,82,691 12,70,75,254 4692563 2.2 Letter dated 27.02.2021, 11.08.2021 and 26.08.2021 were issued to the appellant asking them to furnish their explanation/relevant document so as to verify service tax liability of the appellant. In response, appellant submitted the details and on examination of the details, it was observed that Rs.12,23,82,691/- (as per Form 26AS) was received against services on which the service tax was to be paid under reverse charge mechanism by the recipient of the service. For the differential amount of Rs.46,92,563/-, no explanation was submitted by the appellant. Thus, it was concluded that appellant has required to pay service tax on this amount.
Calculation of service tax is as per the details in table below:-
Period ITR - 26AS Taxable Value Service Tax @ % Service Tax Due 2016-17 4692563 4692563 15 703884 2.3 As revenue was of the view that appellant has suppressed the material facts from the department with intent to evade payment of service tax despite providing taxable services, a show cause notice dated 14.10.2021 was issued to the appellant, asking them to show cause as to why:-
"(i) The Service Tax amounting to Rs.7,03,884/- (Rupees Seven lakhs Three Thousand Eight Hundred and Eighty Four Only )including various cess as applicable should not be demanded and recovered from them under proviso to Section 73(1) of the Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017.
Service Tax Appeal No.70712 of 2025 4
(ii) The due interest on the amount of Service Tax mentioned at (1) above should not be demanded and recovered from them under Section 75 of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017.
(iii) Penalty should not be imposed upon them under Section 78 of the Finance Act 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for failure to pay service tax & suppressing the facts and value of taxable service with intent to evade payment of service tax.
(iv) Penalty should not be imposed upon them under Section 77(1)(b) of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not maintaining the proper records.
(v) Penalty should not be imposed upon them under Section 77(1)(c) of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not furnishing documents.
(vi) Penalty should not be imposed upon them under Section 77 1 (d) of the Finance Act 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for not depositing the short paid / due Service Tax Electronically.
(vii) Penalty should not be imposed upon them under Section 77(2) of the Finance Act, 1994 read with Section 70 of the Finance Act, 1994 readwith Rule 7 of the Service Tax rules 1994 read with Section 142, Section 173, and Section 174 of the CGST Act 2017 in as much as they failed to file periodical returns assessing the due Tax on Services provided by the prescribed Date."
2.4 The said show cause notice was adjudicated as per the Order-in-Original dated 22.05.2023 referred in para 1 above.
2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order.
Service Tax Appeal No.70712 of 2025 5 2.6 Aggrieved appellant have filed this appeal.
3.1 I have heard Shri Rajshekhar Saxena, Advocate for the appellant and Smt Chitra Srivastava, Authorised Representative for the revenue.
3.2 Arguing for the appellant learned counsel submitted that in the present case the demand has been confirmed on the basis of difference in the figures as per the ITR and 26AS. The The demand made is barred by limitation as no specific reason has been stated for invoking the extended period of limitation.
3.3 Authorized Representative reiterated the findings recorded in the orders of the lower authorities.
4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument.
4.2 For upholding Order-in-Original, impugned order records as follows:-
"5.1 I have carefully gone through the case records. By the impugned order demand of service tax of Rs.7,03,884/- alongwith interest has been confirmed upon the appellant on the differential amount of Rs. 46,92,563/- between ITR and Form 26AS of the appellant for the financial year 2016-17.
5.2 From the records of the case, I find that during the adjudication proceedings the appellant has submitted that the said difference is due to the reason that the department has deducted the TDS on actual receipt of manpower.
However, in the present appeal, the appellant has submitted that since the matter being old, they are not in position to give any plausible explanation for the said difference. It is noted that there is no documentary evidence to establish the receipts of differential amount are against supply of manpower supply service which Service Tax Appeal No.70712 of 2025 6 attract service tax liability under reverse charge mechanism. Thus, in absence of any documentary evidence I find no reason to deviate from the findings of the original adjudicating authority.
In view of above, I uphold the impugned order and reject the appeal filed by the appellant being devoid of merit."
4.3 Order-in-Original records as follows:-
"1. From the examination of the submission made by the party during the personal hearing The party has contended that the difference is due to difference in the TDS deducted and some payment has been received in the next year.
2. Where as in support of submission the party has not submitted any documentary support as verified certificate from the service recipient, Ledger of payment, etc.
3. In absence of mandatory document for verification the submission of the party cannot be verified and thus the Service Tax is demandable over the complete differential value on which the demand has been made in the show cause notice.
Thus I confirm the demand so raised in absence of the proper submission."
4.4 While recording the grounds of appeal, impugned order records as follows:-
"3.1 Aggrieved with the impugned order dated 24.05.2023, the appellant has preferred this appeal on the following grounds: -
(i) That it was wrongly put up by their Chartered Accountant during assessment proceedings that the difference of Rs. 46,92,563/ was due to payment received in next year.
(ii) That the appellant is not able to give any plausible explanation to the additional receipts in the ITR for F.Y. 2016-17 as compared to Form 26AS so they do not accept service tax liability on the difference of Rs. 46,92,563/-.
Service Tax Appeal No.70712 of 2025 7 The matter being old, the appellant is not in position to give plausible explanation to this difference on the higher side.
(iii) That any rate service tax was wrongly deducted and deposited on EPF, DA and insurance of the workers. It could not form the part of service tax turnover/receipts of Rs.12,23,82,691/-."
4.5 I find that the demand have been confirmed against the appellant for the period 2016-17 for which notice was issued on 14.10.2021. The only reason stated in the impugned order is that the appellant has not able to provide a plausible explanation for the difference in the figures of ITR and 26AS. For the amount stated in the 26AS, revenue has not even made the demand in the show cause notice, for the reason that the appellant was providing man-power supply services, and the service tax in respect of these services was to be paid by the recipient of services.
4.6 Appellant was not registered with the department and was not were not paying any service tax. In terms of the information received from income tax authorities, as per ITR appellant had shown amount received towards the sale of services as Rs.12,70,75,254/- and as per their Form 26AS they had received Rs.12,23,82,691/-. While receipt in form 26AS has been considered to be in respect of the services on which the service tax was to paid by the service recipient on reverse charge basis. Demand has been made only in respect of the remaining amount. Interestingly, the difference being talked of is not the difference between any service taxpaying documents but the same is vis-à-vis the difference in the receipt as per ITR and 26AS.
4.6 I do not find any reason recorded to show that the difference between the two was in respect of any taxable services provided or otherwise. No enquiry was conducted to determine the nature of the services provided. Only it has been determined that this amount is for providing taxable service. In Service Tax Appeal No.70712 of 2025 8 absence of any investigations or determination of services provided against this amount, I am not in position to determine where this amount should be subjected to tax or not. Further, I do not find any reason to hold that extended period could have been invoked in the present case for making this demand.
4.7 From Order-in-Original and the impugned order, it is evident that for the major portion of the receipt, which is more than 96% revenue itself is of the view that these are in respect of services on which service tax was to be discharged by the service recepient under reverse charge mechanism. That being so, it became much more necessary to investigate and find out the true nature of the remaining receipts, it might be this amount also would have been the amount received for which service tax was payable under reverse charge mechanism. In any case for the purpose of levy of service tax it is not only necessary to establish the service but also the contractual/transactional relationship between the service provider and the service recipient, which is missing in the present case.
4.8 It is clearly a case where appellant has entertained a belief that in respect of all the receipts being received by them, the service tax was payable by the service recipient, when a person entertained such a bonafide belief extended period of limitation would not have been invoked. Hon'ble Supreme Court in the case of Uniworth Textiles Ltd. [2013 (288) ELT 161 (SC)] has held as follows:-
"21. The Revenue contended that of the three categories, the conduct of the appellant falls under the case of "willful misstatement" and pointed to the use of the word "misutilizing" in the following statement found in the order of the Commissioner of Customs, Raipur in furtherance of its claim :
"The noticee procured 742.51 kl of furnace oil valued at Rs. 54,57,357/- without payment of customs duty by Service Tax Appeal No.70712 of 2025 9 misutilizing the facility available to them under Notification No. 53/97-Cus., dated 3-6-1997"
22. We are not persuaded to agree that this observation by the Commissioner, unfounded on any material fact or evidence, points to a finding of collusion or suppression or misstatement. The use of the word "willful" introduces a mental element and hence, requires looking into the mind of the appellant by gauging its actions, which is an indication of one‟s state of mind. Black‟s Law Dictionary, Sixth Edition (pp 1599) defines "willful" in the following manner :-
"Willful. Proceeding from a conscious motion of the will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass...
An act or omission is "willfully" done, if done voluntarily and intentionally and with the specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done..."
23. In the present case, from the evidence adduced by the appellant, one will draw an inference of bona fide conduct in favour of the appellant. The appellant laboured under the very doubt which forms the basis of the issue before us and hence, decided to address it to the concerned authority, the Development Commissioner, thus, in a sense offering its activities to assessment. The Development Commissioner answered in favour of the appellant and in its reply, even quoted a letter by the Ministry of Commerce in favour of an exemption the appellant was seeking, which anybody would have found satisfactory. Only on receiving this satisfactory reply did the appellant decide to claim exemption. Even if one were to accept the argument that the Development Commissioner was perhaps not the most suitable repository of the answers to the queries that the appellant laboured under, it does not take away from the bona fide Service Tax Appeal No.70712 of 2025 10 conduct of the appellant. It still reflects the fact that the appellant made efforts in pursuit of adherence to the law rather than its breach.
24. Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that "the appellants had not brought anything on record" to prove their claim of bona fide conduct, on the appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India v. Ashok Kumar & Ors. - (2005) 8 SCC 760 that "it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility."
25. Moreover, this Court, through a catena of decisions, has held that the proviso to Section 28 of the Act finds application only when specific and explicit averments challenging the fides of the conduct of the assessee are made in the show cause notice, a requirement that the show cause notice in the present case fails to meet. In Aban Loyd Chiles Offshore Limited and Ors. (supra), this Court made the following observations :
"21. This Court while interpreting Section 11-A of the Central Excise Act in Collector of Central Excise v. H.M.M. Ltd. (supra) has observed that in order to attract the proviso to Section 11-A(1) it must be shown that the excise duty escaped by reason of fraud, collusion or willful misstatement of suppression of fact with intent to evade the payment of duty. It has been observed :
„...Therefore, in order to attract the proviso to Section 11- A(1) it must be alleged in the show-cause notice that the duty of excise had not been levied or paid by reason of Service Tax Appeal No.70712 of 2025 11 fraud, collusion or willful misstatement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with intent to evade payment of duties by such person or his agent. There is no such averment to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act.‟ It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assessee is put to notice the assessee would have no opportunity to meet the case of the Department. It was held :
...There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11- A(1), the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the Excise Department places reliance on the proviso it must be specifically stated in the show-cause notice which is the allegation against the assessee falling within the four corners of the said proviso...." (Emphasis supplied)
26. Hence, on account of the fact that the burden of proof of proving mala fide conduct under the proviso to Section 28 of the Act lies with the Revenue; that in Service Tax Appeal No.70712 of 2025 12 furtherance of the same, no specific averments find a mention in the show cause notice which is a mandatory requirement for commencement of action under the said proviso; and that nothing on record displays a willful default on the part of the appellant, we hold that the extended period of limitation under the said provision could not be invoked against the appellant."
4.9 In the following decisions also it has been held that extended period of limitation could not have been invoked for making the demand when the person entertained a bonafide belief about non taxable nature or exempted nature of the services provided.
Anand Nishikawa Co. Ltd. Vs CCE, Meerut 2025 (188) ELT 149;
Infinity Infotech Parks Ltd. Vs UOI 2014 (36) STR 37; CCE, Chennai Vs Chennai Petroleum Corporation Ltd. 2007 (211) ELT 193;
4.10 In view of the above, I find that demand is hit by limitation and the findings recorded in the impugned order in this regard cannot stand in the eyes of law. Accordingly, the impugned order is set aside.
5.1 Appeal is allowed.
(Order pronounced in open court on-15 January, 2026) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp