Homeopathic Medical Publishers Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
The appellant challenged the order of the Commissioner of CGST and Central Excise (Appeals-III), Mumbai, which had upheld service tax liability of ₹27,94,086 under Section 73 of the Finance Act, 1994, together with applicable interest and penalties under Sections 77 and 78 of the Finance Act, 1994.
The appellant, a proprietary concern of a homeopathic medical practitioner, was engaged in medical practice, authoring homeopathic works, and conducting training programmes. Having obtained service tax registration, the appellant regularly filed ST-3 returns. For the financial year 2014-15, taxable services valued at ₹21,10,013 were declared, which were below the taxable threshold.
The department compared the appellant’s Income-tax return with the ST-3 return and observed that income of ₹2,47,15,889 disclosed under the Income-tax Act, 1961 represented untaxed consideration of ₹2,26,05,876 for services. Accordingly, a show cause notice dated 18.10.2019 proposed recovery of service tax of ₹27,94,086.
The appellant submitted a reconciliation statement explaining that the difference arose from medical consultation fees of ₹1,46,23,605, conference-related reimbursements of ₹55,76,636 for participation outside India, and author royalty of ₹23,31,977. According to the appellant, the adjudicating authority rejected the reconciliation solely on the ground that documentary evidence supporting these receipts had not been produced, despite the show cause notice not identifying any taxable service or calling for such evidence. The appellant argued that the proceedings were initiated merely on the basis of differences between the Income-tax return and ST-3 return without establishing that the disputed income represented taxable services.
