Dipak Kumar Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
CESTAT Kolkata allowed the appeal against a service tax demand relating to services rendered during 2015-16. A Show Cause Notice dated 23.12.2020, based on Income Tax Form 26AS, demanded ₹4,10,350 with interest and penalty by invoking the extended period. The appellant submitted that it performed subcontractor work for the Ghar Ghar Jal Yojna and that the services were exempt under Sl. Nos. 25 and 29(h) of Notification No. 25/2012-ST dated 20.06.2012. The appellant therefore neither obtained service tax registration nor paid service tax.
The adjudicating authority confirmed the demand, while the Commissioner (Appeals), after examining the factual and documentary material, reduced the demand to ₹1,94,997. Before the Tribunal, the appellant contended that the extended-period notice could not be sustained when issued solely on Form 26AS without proper verification. The Revenue submitted that part of the demand had been dropped after verification and defended the remaining demand relating to JCB hiring.
The Tribunal noted that the SCN was issued purely on the basis of Form 26AS. It found that the appellant had established that services were rendered to the main contractor in connection with a project covered by the exemption notification. The remaining demand related to hiring out a JCB to the same main contractor for the same project. Although the Tribunal observed that the appellant had no case on merits regarding this confirmed demand, it found that the appellant could have entertained a bona fide belief that service tax was not payable.
