Luit Developers Private Limited Vs Commissioner of CGST & Central Excise
it is trite law that figures of Form 26AS are not to be used for determining Service Tax liability unless there is proof to show that it was on account of any taxable service and relies on the order of the Tribunal in Kush Constructions vs CGST NACIN 2019 (34) GSTL 606 for the same. He also argues that figures submitted to the Income Tax authorities cannot be used for determining Service Tax without evidence of taxable service.
I find force in the contention of the Ld Counsel of the appellant that CA Certified Reconciliation of ST-3 Returns and Form 26AS clearly shows that inflated figure in Form 26AS is because some Service Recipients deducted TDS not only on the rent/commission but also on the Service Tax component. The Service Recipients also confirmed the same. I also find force in the contention of the appellant that part of the service tax being demanded by the Department on RCM basis cannot be sustained since Service tax was already collected by Service Providers as seen from invoices and Reconciliation Certificate. Moreover, some service providers for which the Department is demanding Service Tax on RCM basis are Limited companies or Pvt Ltd Companies like Blue Star Ltd, Kone Elevator India Pvt Ltd and Tractors India Pvt Ltd and therefore tax is not on Reverse Charge, but on forward charge basis as per Point I(A)(v) of Notification No 30/2012-Service Tax [Reverse Charge Notification] dated 20.06.2012.
11. I also find force in the submission of the Ld Counsel for the appellant that figures reflected in Form 26AS cannot be used to determine Service Tax liability unless there is any evidence shown that it was due to a taxable service as held in Kush Constructions vs CGST NACIN 2019 (34) GSTL 606. Also, figures shown to Income Tax authorities cannot be used to determine Service Tax as held in Synergy Audio Visual Workshop Pvt Ltd versus Commissioner of Service Tax Bangalore 2008 (10) STR 578 and CCE Ludhiana vs Deluxe Enterprises 2011 (22) STR 203.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The present appeal has been filed by M/s Luit Developers Pvt Ltd against Order-in-Appeal whereby the Ld Commissioner of CGST, Central Excise & Service Tax (Appeals), Guwahati upheld the order passed by the Ld Adjudicating Authority, i.e. Assistant Commissioner of CGST Dibrugarh Division, whereby he ordered payment of Service Tax (incl Cess) of Rs.10,17,623/- along with applicable interest and imposed equal penalty for the period from April 2014 to March 2017.
2. Briefly stated, the facts of the case are that the appellant provided taxable service of renting immoveable property to various tenants. Third-Party data was received from CBIC Delhi by Dibrugarh Commissionerate regarding the appellant’s mismatch of income reflected in Form 26AS and ST-3 Returns. During investigation and in response to queries raised by the Department, the appellant submitted various documents and information by letters dated 12.05.2017 and 05.06.2017. Parallel investigation for the same period was also initiated by GST Intelligence Guwahati, so the appellant informed Dibrugarh Commissionerate that various documents had also been submitted to it. Based on mismatch of gross income being reflected in Form 26AS as compared to ST-3 Returns, and on non-payment of Tax on RCM basis, Show Cause Notice dated 08.11.2019 was issued to the appellant to show cause as to why Service Tax from February, 2014-15 to February, 2016-17, and for April 2017 to June 2017 should not be demanded under Section 73(1) Finance Act, along with interest and penalty. In Reply to the Show Cause Notice, the appellant submitted CA Certified Reconciliation Form 26AS & ST-3 Returns, and for demand on RCM basis. The Ld Adjudicating Authority did not agree with the Reply of the appellant, however he recalculated the Service Tax demand by including Service Tax paid through CENVAT Credit, and real gross income for the period April 2017-June 2017 after removing the income for the period of July 2017 onwards which came under GST Regime, thereby ordering payment of Service Tax (incl Cess) of Rs.10,17,623/- with interest and penalty. The appellant filed appeal before the first Appellate Authority, who rejected the appeal. Hence the present appeal before the Tribunal.
3. Shri Aakarsh Srivastava, Learned Counsel for the appellant argues that no extra Service Tax is payable because the CA certified Reconciliation of Form 26AS and ST-3 Returns clearly shows that some service recipients deducted TDS on the entire rent/commission plus the Service Tax component causing inflation in Form 26AS as compared to ST3 Returns, and these service recipients, namely M/s JRD Jewels Pvt Ltd, M/s Sohum Shoppe Pvt Ltd, Shree Krishna and ATC Associates, Chandrabali Commercial(I) Pvt Ltd also confirmed this fact by giving certificates of their own.
4. Learned Counsel for the appellant also states that regarding the service tax demand on the appellant on RCM basis, as seen from Reconciliation as well as from the Invoices, Service Tax was already collected by Service Provider and paid to the Department and therefore cannot be demanded again. Also, some of these Service Providers for which tax is being demanded by the Department on RCM basis are Private Limited Companies or Limited Companies, viz. Blue Star Ltd, Kone Elevator India Pvt Ltd and Tractors India Pvt Ltd and thus Service Tax is not on RCM for them as per Point I(A)(v) of Notification No 30/2012-Service Tax [Reverse Charge Notification] dated 20.06.2012 (w.e.f. 01.07.2012), numerates that “service tax for the taxable services provided or agreed to be provided by way of security services or service portion in execution of works contract by any individual, hindu undivided family or partnership firm… ”.
5. Learned Counsel for the appellant further states that even otherwise, it is trite law that figures of Form 26AS are not to be used for determining Service Tax liability unless there is proof to show that it was on account of any taxable service and relies on the order of the Tribunal in Kush Constructions vs CGST NACIN 2019 (34) GSTL 606 for the same. He also argues that figures submitted to the Income Tax authorities cannot be used for determining Service Tax without evidence of taxable service and relies on the order of Tribunal in Synergy Audio Visual Workshop Pvt Ltd versus Commissioner of Service Tax Bangalore 2008 (10) STR 578 and in CCE Ludhiana vs Deluxe Enterprises 2011 (22) STR 203.
6. Learned Counsel for the appellant further argues that the entire demand is for extended period and therefore barred by limitation since extended period is not invocable because :
