Service tax liabilities require substantiation with appropriate documentation; failure to do so justifies tax demands and penalties.

SANJIV SRIVASTAVA:

This appeal is directed against Order-In-Appeal No. GZB-EXCUS-000-APPL-MRT- 91 -24-25 dated 03.07.2024 of the Commissioner, CGST (Appeals), Meerut. By the impugned order following has been held:

“5. Accordingly, I reject the. subject appeal [Appeal No. 92-ST/APPL- MRT/MRT/2023-24 dated 23.02.2024] filed by M/s AKRK Fertilizers (P) Ltd., Chetna Market, Pul Khumran, Saharanpur (U.P.).”

1.2 By Order-in-Original No. 13/AC/ST/SRE/2023 dated 26.12.2023 following has been held:

(i) I confirm the demand and recovery of Service Tax amounting to Rs.7,36,202/- (Rupees Seven Lakh Thirty Six Thousand Two Hundred and Two Only) (including Krishi Kalyan Cess and Swachh Bharat Cess) for the period 2016- 17 from them by invoking first proviso to Section 73 (1) of the Finance Act. 1994 read with Section 174 of the Central Goods and Service, Tax Act, 2017

(ii) I confirm the demand and recovery of Interest from them under Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods and Service Tax Act, 2017.

(iii) I impose a penalty of Rs.7,36,202/- (Rupees Seven Lakh Thirty Six Thousand Two Hundred and Two Only) under Section 78 of the Finance Act 1994 read with Section 174 of the Central Goods and Service Tax Act, 2017

(iv) I impose a penalty / Late fee of Rs.40,000/- [Rs. Forty thousands only] under section 70 of Finance Act 1994, read with Rule 7 of Service Tax Rules, 1994 and Section 174.of the Central Goods and Services Tax Act, 2017 for non- filing of ST-3 Return the Period October, 2016 to March, 2017 This order is issued without prejudice to any other action that may be taken under the Central Excise Act, 1944, the Central Goods and Services Tax/Act, 2017 or-under any other law for the time being in force.

2.1 Appellant was registered with the department vide Service Tax Registration No. AABCA1962BSTOO1D001 and was engaged in providing taxable services as defined under Section 65B of the Finance Act, 1994 .

2.2 From the third party information, as received from the Income Tax Department, it was observed that during the fiscal year 2016-17 there was difference between the value of services declared/reflected in their Income Tax Return/Form-26AS and the value of services as declared in the respective ST-3 returns thereby resulting in short payment of service tax as detailed in table below:

2.3 Appellant was vide letters dated 05.03.2021 and 05.08.2021 the appellant was requested to submit the requisite clarification regarding the said differential value of services in ITR vis-à-vis ST-3 returns and the apparent non-payment of service tax. However, no clarification/information was furnished by the appellant in this regard.

2.4 A Show Cause Notice dated 06-10-2021 was issued to the appellant asking them to show cause as to why:

(i) Service Tax amounting to Rs.7,36,202/- (Rupees Seven Lakh Thirty Six Thousand ( Two Hundred and Two Only) (including Krishi Kalyan Cess and Swachh Bharat Cess)for the period 2016-17 should not be demanded and recovered from them by invoking first proviso to Section 73 (1) of the Finance Act, 1994 read with section 174 of the Central Goods and Service Tax Act,2017.

(ii) Interest should not be demanded and recovered from them on the aforesaid amount under Section 75 of the Finance Act, 1994 read with section 174 of the Central Goods and Service Tax Act.2017

(iii) Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 read with section 174 of the Central Goods and Service Tax Act, 2017 for suppression of facts and contravention of various provisions of Finance Act. 1994.

(iv) Penalty should not be imposed upon them under Section 70 of the Finance Act. 1994and Rule 7 of the Service Tax Rules, 1994 read with section 174 of the Central Goods and Service Tax Act. 2017 for non-filina of ST-3 returns.

2.5 Show cause notice was adjudicated vide Order-in-Original No 37/AC/ ST/SRE/ 2022 dated 15.09.2022 holding as follows:

(i) I confirm the demand and recovery of S