Rakesh Singhal Vs Commissioner of Central Excise and ST (CESTAT Chandigarh)
CESTAT Chandigarh set aside the impugned order confirming a service tax demand of Rs. 1,04,40,288/- along with interest and penalties against Rakesh Singhal, proprietor of S.S. Cargo, who provided Goods Transport Agency (GTA) services. The demand originated from a mismatch between ST-3 returns and figures reflected in Form 26AS/Income Tax Returns. The Tribunal found that the appellant had filed a reply to the show cause notice dated 24.12.2020 on 01.04.2021, contrary to the basis on which the Order-in-Original was passed ex-parte, and that the appellant had not received the personal hearing notice.
On merits, the Tribunal held that service tax demand could not be raised solely on the difference between ST-3 and 26AS/ITR returns without identifying the taxable service, service recipient and consideration. It further found that services provided to body corporates attracted reverse charge under Notification No. 30/2012-S.T. dated 20.06.2012, while services involving giving vehicles on hire to other GTAs were covered by Entry 22 of Notification No. 25/2012-ST dated 20.06.2012. The Tribunal also found errors in computation, including application of incorrect service tax rates and the best judgment method, and held that cum-tax benefit under Section 67(2) was available. It further held that extended limitation was not invocable. The appeal was accordingly allowed with consequential relief, if any, as per law.
CESTAT Chandigarh Sets Aside Service Tax Demand Based on ST-3 and 26AS/ITR Mismatch
Background of the Service Tax Demand
The appeal arose from the order dated 04.03.2024 passed by the Commissioner (Appeals), which upheld the Order-in-Original dated 30.03.2022 passed by the Additional Commissioner, CGST, Rohtak. The impugned order confirmed a demand of Rs. 1,04,40,288/- under Section 73 of the Finance Act, 1944 read with Section 174 of the Central Goods and Service Tax Act, 2017, along with applicable interest under Section 75 of the Finance Act and equal penalty under Section 78 read with Section 174 of the CGST Act. A further penalty of Rs. 10,000 was imposed under Section 77(1)(c)(i) read with Section 174 of the CGST Act.
