Thakkers Harmony Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The appeal before CESTAT Mumbai challenged the order of the Commissioner (Appeals), CGST & Central Excise, confirming a service tax demand of ₹90,625 along with applicable interest, an equal penalty, and an additional penalty of ₹20,000 under Section 77(1)(c) and (d) of the Finance Act, 1994. The demand was raised on the basis of the differential amount reflected between the appellant’s VAT Return and ST-3 Return.
The appellant was engaged in providing construction of residential complex services. For the financial year 2015-16, the appellant declared receipts of ₹24,55,000 in the ST-3 Return, while the Profit and Loss Account reflected receipts of ₹49,55,000. After adding 1% VAT of ₹49,550, the department treated ₹50,04,550 as the taxable value and issued a show cause notice demanding service tax with interest and penalties. The adjudicating authority confirmed the demand, and the Commissioner (Appeals) upheld the order.
Before the Tribunal, the appellant primarily challenged the proceedings on the ground of limitation. It was submitted that although the show cause notice was signed on 31.12.2020, a Postal Department letter dated 12.06.2025 established that the notice was booked for dispatch only on 15.01.2021. According to the appellant, the notice relating to the period from April 2015 to September 2015 was issued after expiry of the limitation period, even after considering the extension available under the Covid-related Ordinance up to 31.12.2020. It was also contended that the Commissioner (Appeals) failed to consider this specific ground, despite its inclusion in the written submissions. The appellant further argued that an invalid show cause notice for the earlier period rendered the entire proceedings unsustainable.
