Roex Security and Maintenance Services Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
CESTAT Kolkata considered an appeal by a security agency against a service tax demand for 2014-15. A Show Cause Notice dated 11.10.2019 proposed a demand of ₹65,56,165 by invoking the extended period. After adjudication, ₹64,97,181 was dropped and ₹58,984 was confirmed. The Commissioner (Appeals) upheld the confirmed demand.
The Tribunal found that the demand arose from the appellant’s Income Tax Form 26 and noted that, after reconciliation, only ₹47,860 plus ₹11,124 could be confirmed. The appellant was registered with the Service Tax division and had been paying service tax. The lower authorities had also accepted the appellant’s eligibility for the 75% abatement applicable to the service.
CESTAT observed that more than 99.9% of the original demand had been disproved through factual evidence. It held that the remaining shortfall of ₹47,860 plus ₹11,124 constituted a minor error and did not establish suppression. The Tribunal further noted that the ₹11,124 service tax demand relating to legal and consultancy services would be eligible as CENVAT Credit.
Accordingly, the Tribunal held that no case of suppression had been made out and set aside the confirmed demand on account of time bar. Consequential relief, if any, was allowed in accordance with law.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant is running a security agency service. A Show Cause Notice was issued on 11.10.2019 on the ground that the appellant has not accounted for the total turnover during the period 2014-15. Accordingly, the demand of Rs.65,56,165/- was made, by invoking the extended period provisions. After due process, the adjudicating authority has dropped the demand of Rs.64,97,181/- and has confirmed the balance demand of Rs.58,984/-. The commissioner (Appeals) has affirmed the OIO. Being aggrieved that the appellant is before the Tribunal.
2. The authorized representative of the appellant reiterates the detailed reply and grounds of appeal filed by them.
3. The Learned AR submits that only after due verification of the books of account and details received from the Income Tax Department, the Show Cause Notice was issued. After going through the reply filed by the appellant and documentary evidence placed by the major portion of the demand has been set aside. Therefore, he submits that confirmed demand is proper after due verification of documentary evidence placed by the appellant. Accordingly, he pleads that the appeal may be dismissed.
4. Heard both the sides and perused the appeal records.
5. After going through the factual details and the documentary evidence placed before me, I find that the issue of demand has come up only based on the Income Tax form 26 filed by the appellant.
6. It is observed that after the appellant made his submissions before the lower authorities and they have agreed that the appellant was eligible for the abatement of 75% available for this service and the appellant was paying the same. After proper reconciliation, it was finally found that out of the total demand of Rs.65,56,165/-, only the demand to the extent of Rs.47,860/- plus Rs.11,124/- could be confirmed.
7. The factual details prove that the appellant was registered with the Service Tax division and was paying the Service Tax. Hence, it is proved that there was no suppression on the appellant’s part. More than 99.9% of the Demand has been has been disproved by the factual evidence. Therefore, this small non paid amount of Rs.47,860/- plus Rs.11,124/-can be taken as minor error, without any view to suppress the factual details. Out of these amounts also, Rs.11,124/- of Service Tax demanded on legal and consultancy services, would be eligible as CENVAT Credit to the appellant. Therefore, no case of suppression has been made out against the appellant.
8. Considering all these factual details, I set aside the confirmed demand on account of time bar. The appellant will be eligible for consequential leave, if any, as per law.
(Dictated and pronounced in the open court)
