Anindita Dutta Vs Commissioner of CGST and Central Excise (CESTAT Kolkata)
CESTAT Kolkata allowed the appeal filed by Anindita Dutta and set aside the service tax demand of Rs. 11,56,266/-, along with interest and penalties under Sections 77 and 78 of the Finance Act, 1994. The appellant was a proprietorship concern providing services as a “Commission Agent”. Based on information received from CBDT concerning unregistered assessees, the Service Tax authorities examined the appellant’s Income Tax Returns and Form 26AS for FY 2015-16 to FY 2017-18 up to June 2017. Revenue alleged that the appellant had received taxable service consideration of Rs.78,13,174/- without obtaining registration or paying service tax.
A Show Cause Notice dated 22.04.2021 proposed recovery of Rs.11,56,266/- with interest under Section 75 and invoked the extended limitation period under Section 73(1) read with Section 174(2) of the CGST Act, 2017. As the appellant did not respond to the notice or appear for personal hearing, the adjudicating authority proceeded ex parte and confirmed the demand, along with an equivalent Section 78 penalty and penalties of Rs.10,000/- each under Sections 77(1)(a) and 77(2). The Commissioner (Appeals) upheld the order.
Before CESTAT, the appellant produced a Certificate of Enlistment, bank statements, financial records and a Chartered Accountant’s certificate showing that the receipts were commissions from M/s. ICICI Lombard for procuring insurance policies for two-wheeler purchasers. The appellant relied on Rule 2(1)(d)(i)(A) of the Service Tax Rules, 1994 read with Section 68(2) of the Finance Act, 1994, contending that the insurance company, as recipient of the service, was liable under reverse charge.
