The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has allowed the appeal of an unregistered service provider and set aside the confirmed demand of Rs. 74,909/- along with interest and penalties, holding that the assessee was entitled to the benefit of Notification No. 33/2012-ST for FY 2013-2014 since his turnover in the preceding financial year was demonstrably Nil as per Form 26AS.
The Tribunal held that where the entire case of the revenue is founded upon Form 26AS data and the assessee has not rendered any taxable services in the preceding financial year, the Form 26AS for that preceding year is a reasonable document to determine the assessee’s turnover.
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The Division Bench comprising Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) observed that there was nothing on record to indicate that the appellant had rendered any taxable services during FY 2012-2013, and that the entire case had been built upon the amounts paid to him as reflected in his Form 26AS. In the absence of any other documentary material, the Bench held that the Form 26AS for FY 2012-2013 was a reasonable document to rely upon for determining the appellant’s turnover.
Since there was no turnover recorded for FY 2012-2013, the appellant was held entitled to the benefit of the exemption under Notification No. 33/2012-ST for FY 2013-2014. Because the value of taxable services rendered during that financial year was admittedly less than Rs. 10 lakhs, the Bench concluded that the appellant qualified for the exemption, and the remaining submissions of both sides were rendered unnecessary as the demand could not survive once the notification was applied.
Briefly, the appellant, a service provider who was not registered with the service tax department, faced a confirmed service tax demand of Rs. 74,909/- along with interest and penalties under the Finance Act, 1994. The proceedings originated from a show cause notice which was issued after investigations were triggered by Form 26AS data shared by the Income Tax Department. Despite repeated requests, the appellant failed to furnish income tax returns, Form 26AS, VAT/Sales Tax Returns, bank account details, contracts, or balance sheets, on the basis of which the SCN was prepared and issued. In his reply, the appellant produced a revised Form 26AS for FY 2013-2014 after M/s. SR Enterprises corrected an erroneous entry of Rs. 12.36 lakhs by revising its TDS returns.
