Pankaj Dua & Associates Vs Commissioner (CESTAT Allahabad)
The appeal arose from an order confirming service tax demand on the appellant based on data obtained from the Income Tax Department for Financial Years 2015-16 and 2016-17, which indicated receipt of consideration without payment of service tax or filing of returns. A show cause notice demanded service tax, which was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals). The appellant contended that it was engaged in providing manpower supply services and, under Notification No. 30/2012-ST as amended, the liability to pay service tax rested on the service recipient under the reverse charge mechanism.
The Commissioner (Appeals) rejected this claim on the ground that the appellant failed to provide sufficient documentary evidence, including proper agreements and invoices, particularly concerning one of the service recipients. However, the Tribunal observed that the appellant had submitted agreements and supporting documents in respect of services provided to one company, which clearly established that the services were in the nature of manpower supply.
The Tribunal held that the burden of proof lies on the Revenue to substantiate allegations of tax evasion, and it cannot shift this burden onto the appellant without conducting proper verification. It noted that the Revenue relied on TDS data but did not make necessary inquiries with the concerned companies to verify the nature of services. The Tribunal found that the agreements on record demonstrated that the appellant provided manpower supply services, thereby attracting the reverse charge mechanism, under which the service recipient is liable to pay service tax.
