Custom, Excise & Service Tax Tribunal
Name Singh vs Cgst Kanpur on 10 April, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.II
Service Tax Appeal No.70073 of 2024
(Arising out of Order-in-Appeal No.757-ST/Alld/2022 dated 27/02/2023
passed by Commissioner (Appeals) Customs, Central Excise & Service Tax,
Allahabad)
Shri Name Singh (Naim Singh), .....Appellant
(Devi Road, Karhal, Mainpuri)
VERSUS
Commissioner of Central Excise &
CGST, Kanpur ....Respondent
(117/7, Sarvodaya Nagar, Kanpur-208005) APPEARANCE:
Ms Stuti Saggi, Advocate & Shri S.P. Ojha, Consultant for the Appellant Shri Abhishek Mukharjee & Shri Prashant Kumar, Authorised Representatives for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70106/2026 DATE OF HEARING : 10 April, 2026 DATE OF DECISION : 10 April, 2026 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.757- ST/Alld/2022 dated 27/02/2023 passed by Commissioner (Appeals) Customs, Central Excise & Service Tax, Allahabad. By the impugned order following has been held:-
"5. In view of the above, I modify the impugned Order dated 26.05.2022, as under:
(i) Confirm demand of Service Tax (including Cesses) is reduced to Rs. 60,676/-along with interest;
(ii) Imposition of penalty under Section 78 of the Act is reduced to Rs. 60,676/-.
Service Tax Appeal No.70073 of 2024 2
(iii) Penalty imposed under Section 77(1) (a) 77(1) (c) 77(1) (d), 77(2) and under Section 70 of the Ace read with Rule 7(C) of the Service Tax-Rules, 1994 in the impugned order shall remain unchanged." 1.2 Earlier appeal filed by the appellant was dismissed on the ground of maintainability as the disputed amount of service tax involved in the appeal is Rs.60,676/-, much below the amount of Rs.2 lakhs as per second proviso to Section 35B(1). However, Hon'ble High Court vide order dated 27.01.2026 in Central Excise Appeal No 3 of 2026 remanded the matter to the Tribunal.
2.1 Appellant is engaged in providing taxable services as defined by Section 65B(44) of the Finance Act, 1994 and are liable to pay service tax as per the provisions of Section 66B ibid. Appellant had not obtained Service Tax Registration as required under Section 69 of the Finance Act, 1994. 2.2 On the basis of the information received from Income Tax Department, it was observed that appellant has provided taxable services during the F.Y. 2015-16 but have not paid due service tax.
2.3 Inquiries were initiated and appellant vide letter dated 07.11.2019 was asked to provide the documents i.e. Form ST-2; details of nature of work/services provided; ST-3 returns, Bills Invoice/ Job-work bills issued towards services provided, Form- 26AS, Balance Sheets along with Profit & Loss A/c, Income Tax returns along with computation/calculation of Income:
Reconciliation of amount received under different Sections of Income Tax [excluding Sec 194A] in Form-26AS vis-à-vis taxable value of services reflected in ST-3 returns along with reasons for difference, if any, Reconciliation of amount reflected under the head of 'Revenue from Operations' in Balance- sheet/Computation of Income vis-à-vis taxable value of services reflected in ST-3 returns along with reasons for difference, if any and any other relevant related documents in respect of service provided for the period from April. 15to June, 17. 2.4 Appellant vide letter dated 23.12.2019 submitted that during the relevant period they have received works contract for Service Tax Appeal No.70073 of 2024 3 services provided by way of construction of road which are exempt from payment of service tax, the same are reproduced as under-
S.N. Period/F.Y. Name of the Department (M/s.) Amount in Rs.
1. 2015-16 Ex. Eng. ConstDiv, PWDMainpuri 8,57,650
2. 2015-16 Ex. Eng. Prov, Div, PWDMainpuri 61,88,385
3. 2015-16 Sub-total 70,46,035
4. 2016-17 Ex. Eng. ConstDiv, PWDMainpuri 40,14,597
5. 2016-17 Ex. Eng. Prov.Div, PWDMainpuri 24,88,730
6. 2016-17 Sub-total 65,03,327 7. Apr 17 to No Payment Till the date 0 Jun 17 8. Apr 17 to Sub-total 0 Jun 17
9. Apr 17 to Total 1,35,49,362 Jun 17 2.5 Further, correspondences were made and appellant was asked to provide Work orders/ Contracts/ Agreements made with the service recipients. However, no response was received.
Hence, appellant failed to produce other related records duly maintained by them during their business activities. Accordingly, on the basis of available information provided by the Income Tax Authorities, appellant short paid service tax has been computed as detailed in tables below:-
Service Tax Payable Period Taxable value Service Tax (Inclusive of Cess) 1 2 3 Apr'15 to May 15 931981 115193 01.06.15 to 14.11.15 2662673 372774 15.11.15 to 31.03.16 1337571 193948 Apr 16 to May'16 555240 80510 Jun 16 to Mar'17 3997089 599562 Apr '17 to Jun'17 0 0 Total 9484553 1361987 2015-16 107660 15610 2016-17 107880 16181 G. Total 9700093 1393778 Service Tax payable on Reverse Charge Basis Period Legal Fees Service Tax (Inclusive of Cess) 2015-16 5000 725 2016-17 5000 750 TOTAL 10000 1475 Service Tax Appeal No.70073 of 2024 4 2.6 Alleging suppression show cause notice dated 18.12.2020 was issued to the appellant asking them to show cause as to why-
"(i) An amount of Rs.1,38,64,902/-(Rupees One Crore Thirty Eight Lakh Sixty Four Thousand Nine Hundred Two Only) should not be treated as the value of taxable services provided by them during the period from Apr 15 to Jun 17, and accordingly Service Tax amounting to Rs.13,95,253/- (Rupees Thirteen Lakh Ninety Five Thousand Two Hundred Fifty Three Only) including Education Cess, Secondary & Higher Education Cess.
Swachh Bharat Cess and Krishi Kalyan Cess not paid should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017;
(ii) Interest at the appropriate rate should not be charged and recovered from the "Noticee' in respect of amount of service tax mentioned at S.N. (i) above under Section 75 of the 'Act' read with Section 174 of CGST Act, 2017;
(iii) Penalty should not be imposed upon them in respect of amount of service tax mentioned at S.N. (i) above under Section 78 of the 'Act' read with Section 174 of CGST Act, 2017.
(iv) Penalty under Section 77(1)(a), 77(1)(c), 77(1)(d) and 77(2) of Finance Act, 1994 read with Section 174 of CGST Act, 2017 should not be imposed upon them for their various acts of omission and commission as discussed above;
(v) the late fee/ amount under Section 70 of Finance Act, 1994 read with Rule 7(C) of ibid and read with Section 174 of CGST Act, 2017should not be imposed upon them for their various acts of omission and commission as discussed above;"
2.7 The said show cause notice was adjudicated as per the Order-in-Original dated 26.05.2022 holding as follows:-
"ORDER Service Tax Appeal No.70073 of 2024 5
(i) I confirm the demand of service tax amounting to Rs.
3,15,012/- (Rupees Three Lakh Fifteen Thousand Twelve Only) under proviso to Section 73(1) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017 and order to recover the same from M/s.Name Singh. Devi Road, Karhal, Mainpuri under Section 73(2) of the Finance Act, 1994 as amended read with Section 174 of the CGST Act, 2017, and I drop the rest of demand of Rs. 10,80.241/- as discussed above.
(ii) I order to recover interest at the applicable rates on above said amount of confirmed demand from the Noticee under Section 75 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 as discussed above.
(iii) I impose a penalty of Rs. 3.15.012/- (Rupees Three Lakh Fifteen Thousand Twelve Only) upon the Noticee under Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 as discussed above. Further I give an option to the party to pay 25% penalty of demand confirmed as provided in the Section 78 of the Act, if Service Tax and Interest is paid within a period of 30 days of the date of receipt of this order. Further the benefit of reduced penalty shall be available only if the amount of such reduced penalty is also paid within 30 days.
(iv) I impose a penalty of Rs.2000/- (Rupees Two Thousands only) upon the Noticee under Section 77(1)(a) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017as discussed above.
(v) I impose a penalty of Rs.2000/- (Rupees Two Thousands only) upon the Noticee under Section 77(1)(c) of the Finance Act. 1994 read with Section 174 of CGST Act, 2017 as discussed above.
(vi) I impose a penalty of Rs.2000/- (Rupees Two Thousands only) under Section 77(1)(d) of the Finance Act, 1994 read with Section 174 of CGST Act, 2017 upon the Noticee as discussed above.
Service Tax Appeal No.70073 of 2024 6
(vii) I impose a penalty of Rs.2000/- (Rupees Two Thousands only) upon the Noticee under Section 77(2) of the Finance Act, 1994 read with Section 174 of CGST Act. 2017 as discussed above.
(viii) I impose a penalty of Rs.20000/-(Rupees Twenty Thousand only) upon the Noticee under Section 70 of the Finance Act. 1994 read with Rule 7(C) of Service Tax Rules, 1994 read with 174 of CGST Act. 2017 as discussed above."
2.8 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been disposed of as per the impugned order referred in para 1 above.
2.9 Aggrieved appellant have filed this appeal. 3.1 I have heard Shri S.P. Ojha & Ms Stuti Saggi, Advocate appearing for the appellant and Shri Abhishek Mukharjee and Shri Prashant Kumar, Authorised Representatives appearing for the revenue.
3.2 Arguing for the appellant learned Counsel submits that- Appellant has provided services of construction of road which were exempt from payment of service tax. Commissioner (Appeals) do not dispute the same. They were also supply material for construction of the roads. Commissioner (Appeals) has allowed benefit in respect of all the receipts except for four receipts which were in respect of the sail of goods.
This demand has been confirmed by observing that appellant failed to provide work order, supply order or VAT receipt for the said supply.
Legal services against which demand has been made on reverse charge basis, the demand has been confirmed only on the basis that appellant has failed to provide the legal documents to support their claim.
These amounts were towards purchase of tendered documents and the Chartered Accountant has wrongly shown the same as legal fee in their documents. Appeal may be allowed.
Service Tax Appeal No.70073 of 2024 7 3.3 Authorized Representative reiterates 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:-
"4.8 It is further observed that the appellant has provided copies of Form 26 AS for the financial year 2015-16 & 2016-17 which reflects that appellant has received Rs.1,35,49,362/ during the period 2015-16 & 2016-17 from Construction & provincial Division-PWD, Mainpuri which appears to be against the contract bond allotted to them during the 2014-15, 2015-16 and 2016-17 for Rs. 1,16,69,054/-
4.9 The details of amount received by the appellant vis-a- vis Form 26 AS submitted by the appellant are as under:
Sr. Name of the Service Contract Bond Payment received in the no Receiver No. Financial year as per . 26AS statement FY 2015-16 FY 2016- 17
1. Executive Engineer CB 204723 Provisional Division No.48/EE/2014-15 PWD, Mainpuri
2. Executive Engineer CB No-96/EE 1726343 Provisional Division /2014-15 PWD, Mainpuri
3. Executive Engineer CB No- 2560559 Provisional Division 19/EE/2015-16 PWD, Mainpuri
4. Executive Engineer CB NO- 1696760 Provisional Division 29/ΕΕ/2015-16 PWD, Mainpuri
5. Construction Division CB No-56/EE 625825 1710946 PWD, Mainpuri 2015-16
6. Construction Division CB No-69/EE 231825 793200 PWD, Mainpuri 2015-16
7. Executive Engineer CB No- 2488730 Provisional Division 30/ΕΕ/2016-17 PWD, Mainpuri
8. Construction Division CB No-43/EE 93571 PWD, Mainpuri /2016-17
9. Construction Division CB No- 922239 PWD, Mainpuri 41/EE/2016-17 10 Construction Division CB No- 99965 . PWD, Mainpuri 52/EE/2016-17 11 Construction Division So No-2041/4 Mg 98768 . PWD, Mainpuri 12 Construction Division So No-2087/4 Mg 98768 . PWD, Mainpuri 13 Construction Division So No-2105/4 Mg 98725 Service Tax Appeal No.70073 of 2024 8 . PWD, Mainpuri 14 Construction Division So No- 342/4 Mg 98415 PWD, Mainpuri Total 7046035 6503327 Gross total received in Form 26AS 1,35,49,362 4.10 On perusal of the Form 26 AS, it is evident that the payment of Rs. 1,35,49,362/- during the period 2015-16 & 2016-17 to the appellant have been received from Construction & provincial Division-PWD, Mainpuri and are also directly co-relatable to the Contract Bonds listed in para 4.7.
4.11 It is further observed from the perusal of payment details and work orders that the appellant during the impugned period has received Rs.3,94,676/- for suppy of stone ballast and stone dust against the four work orders/supply orders namely So No-2041/4 Mg dated 05/09/2016, So No-2087/4 Mg dated 14/09/2016, So No-
2105/4 Mg dated 16/09/2016 & So No- 342/4 Mg dated 17/02/2016. It is found that the appellant has neither provided invoices of supplies made against these work orders/supply orders nor the VAT returns filed by them if any against the said supply. In absence of invoice and VAT returns, I find that the appellant is not eligible for exemption of Rs.3,94,676/- during the period 2016-17 received to them against the supply of materials. Thus, the appellant is liable for demand of service tax of Rs.59,201/ on consideration of Rs.3,94,676/-.
4.12 However, in respect of remaining consideration of Rs.1,31,54,686/-[Rs.1,35,49,362 Rs. 3,94,676] it is observed that for this amount the contracts have been awarded to the appellant from Construction & provincial Division-PWD, Mainpuri which is government authority for construction and maintenance of road which are covered under the exemption Notification No. 25/2012-ST dated 20.06.2012 and the payment against these contract bonds have been received to the appellant during the period 2016-17 which is clearly evident from the form 26AS submitted by the appellant. Thus, it is found that the amount of Rs.1,31,54,686/- pertains to exempted category Service Tax Appeal No.70073 of 2024 9 of work under Notification No. 25/2012-ST dated 20.06.2012 and hence no service tax is leviable on this amount.
4.13 As regard to the confirmation of demand of service tax of Rs.15,610/- & Rs.16,181/- in the financial year 2015-16 & 2016-17 respectively in the impugned order against the rent of Rs. 1,07,660/- in 2015-16 and Rs. 1,07,880/-in 2016-17 received by the appellant. The appellant has contested that they have received Rs.37,53,780/- in the year 2014-15 from provincial division PWD, Mainpuri and since this receipt was towards exempted category of service provided by them to PWD, they were eligible for threshold exemption of Rs.10,00,000/- in the next financial year ie 2015-16 when they have received Rs.1,07,660/- only towards taxable service which clearly falls below threshold exemption under Notification No. 33/2012-ST dated 20.06.2012.
4.13(1) It is observed that appellant has provided Form 26AS, copy of ITR, copy of work order no.130/EE dated 26.02.2014, 106/EE datd 31.12.13 & 48-EE dated 10.10.14 and payment certificates issued by Executive Engineer, PWD, Mainpuri in their support that they have provided exempted service and do not have any other taxable receipts in 2014-15. On perusal of these documents it is found that the appellant has been awarded work of construction/maintenance of road from provincial division, Mainpuri and has received Rs.37,53,780/- as per Form 26AS and ITR for the period 2014-15 against the work orders no. 130/EE dated 26.02.2014, 106/EE dated 31.12.13 & 48-EE dated 10.10.14 from provincial division, Mainpuri. Thus, I find that the appellant has Rs.37,53,780/- from provincial division, PWD, Mainpuri for construction of road which is exempted under Notification No. 25/2012-ST dated 20.06.2012. Since as per the ITR and Form 26 AS, the appellant has no other income except exempted income of Rs.37,53,780/- in 2014-15, therefore, as per the Notification No. 33/2012-ST dated 20.06.2012 Service Tax Appeal No.70073 of 2024 10 the appellant is eligible for threshold exemption of Rs.10 Lakh in the next financial year ie 2015-16. The appellant has received Rs.1,07,660/- in 2015-16 towards taxable income which is below the threshold exemption of Rs. 10 Lakhs, therefore, the demand of service tax of Rs.15,610/- against receipt of Rs. 1,07,660/- (rent receipts) in the impugned order is not justified.
4.13 (ii) Similarly, the appellant is also eligible for threshold exemption of Rs. 10 Lakh in the next financial year ie 2016-17 because their net taxable income was below Rs.10Lakh in the preceding financial year i.e 2015-
16. I find that out of the total income of Rs.65,03,327/ in the financial year 2016-17, Rs.3,94,676/-pertains to supply of goods for which appellant could not provide invoice and VAT returns and rest of the amount pertains to the exempted category of work being receipts towards road construction which is exempted service. Thus, the total taxable turnover of the appellant in financial year 2016-17 is also below Rs.10 Lakhs which falls under threshold exemption of Rs.10 Lakhs as per Notification No.33/2012-ST dated 20.06.2012. Therefore, the demand of service tax of Rs. 16,181/- against receipt of Rs. 1,07,880/- (rent receipt) in the impugned order is also not justified.
4.14 As regard to the confirmation of demand of service tax of Rs.1,475/- on legal fee during the period 2015-16 & 2016-17, the appellant has contested that this amount pertains to purchase of tender however, their CA has wrongly shown this amount in the head of legal fee. I find that the appellant has not provided any documentary evidence in support of their claim. Since this amount has been incurred towards legal fee by them in their balance sheet during the period 2015-16 & 2016-17, the same is taxable under legal consultancy service' under reverse charge mechanism as per Notification No. 30/2012- ST'dated 20.06.2012. Thus, I find that the demand of Rs.1,475/ on legal expense of Rs.10,000/- during the Service Tax Appeal No.70073 of 2024 11 period 2015-16 & 2016-17 has been rightly confirmed in the impugned order."
4.3 Appellant submitted the copies of supply order and their VAT assessment evidencing the supply of the materials and the same are reproduced below:-
Service Tax Appeal No.70073 of 2024 12 Service Tax Appeal No.70073 of 2024 13 4.4 They also provided copy of the assessment order as follows:-
Service Tax Appeal No.70073 of 2024 14 Service Tax Appeal No.70073 of 2024 15 Service Tax Appeal No.70073 of 2024 16 Service Tax Appeal No.70073 of 2024 17 4.5 From perusal of the above documents, it is evident that the receipt against which demand of service tax has been made are in fact towards the supply of material. As these are in relation to supply of material and have been duly assessed by the state VAT authorities the same is outside the preview of service tax, the demands made in respect of this needs to be set aside. Undisputedly as evident from the appeal memo filed before the Commissioner (Appeal) it is evident that these documents were also made available to Commissioner (Appeal) also.
4.6 A demand of Rs 1475 has been made on the appellant in respect of legal fees, reflected as expense in the balance sheet Service Tax Appeal No.70073 of 2024 18 of the appellant. Appellant have not disputed this demand in their appeal filed. From the prayer made in the appeal memo reproduced below it is evident that they have sought relief only in respect of the demand made in respect of the four instances of supply of material:
"PRAYER
(i) That the order dated 25.05.2023 of Commissioner (Appeals) confirming the demand of service tax may kindly be set aside to the extent as requested in this appeal memo.
(ii) The ineterst demand may kindly be quashed of the demand of service tax of Rs 59,201/-
(iii) Penalty of Rs 59,201/- under Section 78 may kindly be set aside.
(iv) Any other relief deems fit may kindly be granted.
In view of above submissions, it is prayed that the appeal may kindly be allowed with consequential relief." 4.7 In view of the above, I do not find much merits in the findings recorded in the impugned order in respect of the demands made on four instances of supply of material and the same are set aside.
5.1 Appeal is allowed to extent appellant has prayed for in the appeal memo..
(Pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp