Custom, Excise & Service Tax Tribunal
M/S Airline Reservation System vs Commissioner Of Central Goods & ... on 21 April, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 60639 of 2024
[Arising out of Order-in-Appeal No. CHD-EXCUS-001-LDH-APP-147-2023-24 dated
21.12.2023 passed by the Commissioner (Appeals), CGST, Chandigarh]
M/s Airline Reservation System ......Appellant
Varun Jain S/o Sh. Rajiv Jain,
Hira Colony, Hoshiarpur,
Punjab 146001
VERSUS
Commissioner of Central Goods & Service ......Respondent
Tax, Jalandhar Central GST Bhawan, C.R. Building Model Town Road, Jalandhar, Punjab 144001 APPEARANCE:
Shri Gaurav Sharma and Shri Nishant, Advocate for the Appellant Shri Varun Sharma, Authorized Representative for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) FINAL ORDER NO. 60312/2026 DATE OF HEARING: 16.04.2026 DATE OF DECISION: 21.04.2026 The present appeal is directed against the impugned order dated 21.12.2023 passed by the Commissioner (Appeals), CGST, Chandigarh dismissing the appeal of the appellant and upheld the Order-in-Original dated 13.03.2023 and confirmed the demand of service tax of Rs. 97,954/- under Section 73, interest under Section 75 and penalties under Section 77 & 78 of the Finance Act, 1994.
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2. Briefly the facts of the present case are that the appellant is working as an actor in television serials has been regularly filing ST- 3 returns and paying service tax on receipt basis. During the financial year 2014-15, the appellant provided acting services exclusively to M/s. Shashi Sumeet Productions Private Limited, Mumbai and the said Production House deducted TDS on the professional fees paid to the appellant. The Department, on the basis of third-party information received from the Income Tax Department, observed a discrepancy between: (a) Gross receipts of Rs. 31,83,580/- reflected in the appellant's ITR, and (b) Rs. 23,91,070/- reflected in the ST-3 returns and on the basis of this discrepancy, a demand of Service Tax of Rs. 97,954/- was raised by way of issuance of show cause notice dated 25.11.2020 invoking the extended period of limitation under the proviso to Section 73(1) on the ground of alleged suppression; by following the due process, the adjudicating authority vide Order-in-Original dated 13.03.2023 confirmed the demand and aggrieved by the said order, the appellant filed the appeal before the Commissioner (Appeals) who vide impugned order dismissed the appeal of the appellant. Hence, the present appeal.
3. Heard both the parties and perused the material on record.
4. The learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents. The learned Counsel 3 ST/60639/2024 for the appellant further submits that the Order-in-Original dated 13.03.2023 has been passed in gross violation of the mandatory time limit prescribed under Section 73(4B) of the Finance Act, 1994, thereby, rendering the entire proceedings time-barred and non est in law. The learned counsel further submits that in the present case, the show cause notice was issued on 25.11.2020 and statutory deadline for adjudication on 24.11.2021, whereas Order-in-Original was passed on 13.03.2023 which is beyond the statutory limit of approximately 15 months beyond the statutory deadline. He further refer to CBIC instruction which are binding on the adjudicating authority, whereby the CBIC vide instruction bearing F.No. 280/45/2015-CX dated 17.09.2015 has directed the field formation to pass adjudication orders within time limits as prescribed under the Central Excise Act, 1944 and Finance Act, 1994. The learned counsel also refer to the certain judgments holding that Circulars are binding upon all the field formation and the adjudicating authority and the impugned order passed beyond the statutory deadline is liable to be set aside.
4.1 The second ground raised by the learned counsel for the appellant is that in this case, the Department has raised the demand by invoking the extended period of limitation under proviso to Section 73(1) which can only be invoked where there is a positive evidence of fraud, suppression of facts, willful mis-statement, or deliberate contravention with intent to evade payment of service tax, whereas in the present case, none of these elements is present because the appellant has been filing the ST-3 returns and has been 4 ST/60639/2024 paying the service tax on the basis of receipt. He further submits that this issue has been considered by this Bench of the Tribunal in the case of M/s New Prakash Roadways Vs. Commissioner of Central Excise and Service Tax, Rohtak vide Final Order No. 60484/2024 dated 22.08.2024 wherein, under identical circumstances, Division Bench of this Tribunal has held that the entire demand is barred by limitation because the Revenue has not been established any essential ingredients required for invoking the extended period. He has also relied upon the following judgments:
Pushpam Pharmaceutical Company Vs. Collector 1995 (78) E.L.T. 401 (S.C.):
Lubri Chem Ind. Ltd. Vs. Collector 1994 (73) E.L.T. 257 (S.C.).
Collector of Central Excise Vs. Malleable Iron & Steel Casting Co. Pvt. Ltd. 1998 (100) E.L.T. 8 (S.C.).
Quest Engineers & Consultants Pvt. Ltd. Vs. Commissioner, CGST & C.Ex., Allahabad 2022 (58) G.S.T.L. 345 (Tri.-All.).
R. Ramdas Vs. Joint Commissioner of Central Excise, Puducherry 2021 (44) G.S.T.L. 258 (Mad.).
4.2 He further submits that in the present case the demand has been raised solely on the basis of income tax data/Form 26AS received from the Income Tax Department and without carrying out any independent verification, and without specifying the category of service under which the demand is raised. He further submits that ITR figures reflect amounts on accrual basis including amounts still 5 ST/60639/2024 receivable/due, whereas service tax under receipt basis is payable only on actual realization. Form 26AS reflect amounts on which TDS was deducted not amounts actually received in the relevant year.
These are fundamentally different basis of accounting and the learned counsel also refer to CBIC instruction dated 26.10.2021 which specifically instructed that indiscriminate demands should not be raised on the basis of Income Tax data without proper verification.
5. On the other hand, learned authorized representative for the Department reiterated the findings of the impugned order.
6. I have considered the submissions made by both the parties and as regards the first ground raised by the appellant that the impugned order is time barred under Section 73(4B) of the Finance Act, 1994 because the Order-in-Original has not been passed within the mandatory time limit prescribed under Section 73(4B) of the Finance Act. In this regard, I may observe that this issue of delayed adjudication is pending before the Hon'ble Apex Court and therefore, it will not be proper for me to give any findings on the same.
7. As regards the other issue of time bar, this issue was considered by this Bench of the Tribunal in case of M/s New Prakash Roadways Vs. Commissioner of Central Excise and Service Tax, Rohtak , (cited Supra), this Bench of the Tribunal has dealt with the invocation of extended period of limitation under identical circumstances and has held in para 10 as under:
6 ST/60639/2024 "Further, we find that the Show Cause Notice does not bring about any positive act on the part of the appellants with intent to evade payment of duty so as to allege suppression, mis-declaration etc. in order to Invoke extended period. We find that the Tribunal has been consistently holding that extended period cannot be invoked when the case is made on the basis of 26AS statement, more so, when no ingredients for Invocation of extended period are present in the case. Therefore, we are of the considered opinion that no case has been made for invocation of extended period. Moreover, we find that in the instant case, the appellant is a GTA service provider wherein the service recipient is liable to pay service tax on Reverse Charge Mechanism. The Department failed to adduce any evidence to the effect that the appellants have rendered taxable service to the category of persons who do not fall under the category liable to pay service tax on RCM basis and this appropriate tax requires to be paid by the appellants themselves. In the absence of the same, the benefit of doubt has to be given to the appellants.
It is not proper on the part of the Department to make allegations and show the failure on the part of the appellants to provide records as evidence. It is for the Department who are alleging to adduce evidence. We find that in the absence of records no clear conclusion on the taxability of the appellants cannot be arrived at. We find that the cases relied upon by the learned Authorized Representative for the Department are distinguishable on facts. Therefore, we are not taking them into account. Hence, we are of the considered opinion in view of the discussion above and the case laws relied upon by the appellants that extended period cannot be invoked and thus, the appeal succeeds on limitation. It is to make it clear that as the appeal succeeds squarely on limitation, we are not going into the merits of the case and the rival contentions thereof."
8. Further, as regards the another issue that the entire demand has been raised on the basis of difference between the ITR and the Service Tax returns. I find that this issue has also been considered 7 ST/60639/2024 by this Bench of the Tribunal in the case of M/s Rakesh Singhal v. Commissioner of Central Excise and ST, Rohtak, wherein, it has been observed as under:
"7. Further, we find that it is a settled law that demand cannot be raised solely on the basis of difference between ST-3 and 26AS/ITR. This issue is no more res integra and has been considered by various benches of Tribunal and this Bench in the case of Indian Machine Tools Manufacturers Association Vs. Commissioner of Central Excise, Panchakula vide Final Order No. 60403/2023 decided on 18.09.2023 and Shreejee RMC Private Limited Vs. Commissioner of CGST & C.E., Rohtak vide Final Order No. 60233/2024 decided on 14.05.2024 has examined this issue and has held in para 11 which is reproduced herein below:
11. Coming to third and final issue as to whether any demand can be sustained on the basis of difference between the figures of ST-3 Returns and the balance sheets, we find that it is a settled principle of law that service tax can be levied only when there is a clear Identification of service provider, service recipient and consideration paid for the same. In the absence of any such evidence of the service recipient and the service provided, service tax cannot be demanded and confirmed. For this reason, we are of the
8 ST/60639/2024 considered opinion that it is not open for the Department to raise demands on the basis of other statutory returns like Income Tax Returns or balance sheets.
without proving that such service has been rendered by the assessee and consideration thereof has been received.
Similarly, no service tax demand can be raised and confirmed on the basis of notional income.
8. Further, the Tribunal in the case of Sudesh Kumar Gupta Vs. Commissioner of CE & CGST, Lucknow vide Final Order No. 70088/2025 decided on 25.02.2025 and has held in para 5 which is reproduced here in below:
5. On perusal of the above stated findings of this Tribunal in warious cases, we note that the issue is no more res integra and It has been decided that only on the basis of data in Form 26AS, Revenue cannot issue show cause notice demanding service tax. Here we note that charging Section 66B of Finance Act, 1994 provides for levy of service tax at a specific percentage on the value of service. Section 67 of Finance Act, 1994 provides that where service tax is chargeable on a taxable service with reference to its value, then such value shall be the consideration in money charged by the service provider. Therefore, it is primarily important to determine the value on which service tax shall be levied at a specific percentage and such value should be the value of taxable service. Clause (44) of Section 65B of Finance Act, 1994 has provided for
9 ST/60639/2024 definition of service and it has elaborately dealt with a list of activities which shall not be included in such definition. Further, Section 66D of Finance Act, 1994 has provided for negative list of services where the activities covered by such negative list do not qualify to be a taxable service. Therefore, it is clear that while determining value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and which are mentioned in the definition of service as those which are not covered by such definition become important. Therefore, we come to a conclusion that for arriving at amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined as the first step. Further, there are services where entire or part of service tax is to be paid by service recipient. Further, through mega Notification No. 25/2012-ST dated 20.06.2012, large number of services are exempted from levy of service tax. From any data, unless scrutiny in respect of all the above stated aspects is not done, then such data cannot be taken as such as value for calculation of service tax. Precisely this exercise has not been carried out in the present order-in-original. 8.2 Therefore, by following the ratio of the decisions cited (supra) wherein, it has been consistently held that demand cannot be raised on the basis of the difference between ST-3 and 26AS/ITR returns, hence, on this issue alone, we set aside the demand.
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9. Further, I find that the case of the appellant is squarely covered by the above said decisions and by following the same, I am of the considered opinion that the impugned order is not sustainable in law, therefore I set aside the same by allowing the appeal of the appellant.
(Order pronounced in the open court on 21.04.2026) (S. S. GARG) MEMBER (JUDICIAL) Kailash