Back
2026 Supreme(Online)(CESTAT) 193
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Sanjiv Srivastava, Technical Member
M/s Mayank Foods & Beverages Pvt. Ltd. – Appellant
Versus
Commissioner of Central Excise & Service Tax, Noida – Respondent
Order-in-Appeal No.NOI-EXCUS-002-APP-86-23-24
Shri Arjit Gupta, Advocate, Shri Manish Gupta, Advocate
Shri Manish Raj, Authorised Representative
Suppression of taxable value in service tax returns constitutes intent to evade payment, justifying demand and penalties under the Finance Act, 1994.
Headnote:(A) Finance Act, 1994 - Sections 68(1), 68(2), 70, 73(1), 78, 75, and 174 of the Central Goods and Services Tax Act, 2017 - Service Tax demand - Appellant short paid an amount of Rs. 20,71,984/- due to suppression of taxable value in ST-3 returns - Appeal dismissed as having no merit. (Paras 10, 4.8)
(B) Suppression of facts - Intent to evade tax must be established - Appellant did not challenge the figures in the SCN, indicating willful suppression - Penalty under Section 78 justified. (Paras 4.5, 4.6)
Facts of the case:
The appellant is a service provider who failed to declare accurate service income in their ST-3 returns for FY 2015-16, 2016-17, and 2017-18, leading to a significant shortfall of service tax payment. The investigations by the tax department revealed discrepancies with the Income Tax data, leading to a demand of Rs. 20,71,984/-.
Findings of Court:
The adjudicating authority upheld the service tax demand and penalties based on evidence of suppressed income and improper returns.
Issues: The court examined whether the appellant's appeal was valid given the suppression of facts and the legality of the penalties imposed.
Ratio Decidendi: The failure to declare correct service receipts in ST-3 returns warrants invocation of Section 73(1) and upholding of penalties under Section 78 as there was clear intent to evade tax through suppression.
Result: Appeal dismissed.
SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.NOI-EXCUS-002-APP-86-23-24 dated 26/05/2023 passed by Commissioner (Appeals) Central Goods & Services Tax, Noida. By the impugned order following has been held:-
ORDER
10. In view of the above facts and circumstances, the appeal bearing No. 307/ST/Noida/Appl/GBN/2022-23 dated 29.11.2022 has been filed by M/s Mayank Foods & Bevarages Pvt. Ltd., Mohalla Sahukara, Sarai Gali, Behind Nagar Palika, Faridpur, Bareilly (U.P.) is dismissed as having no merit. The Order-In-Original No. 22-ST- DEM/AC/BLY-II / 2022 dated 29.09.2022 issued under C.No. V(30)Adj./TPD/BLY-II/SCN/MF/123/2020/853 dated 29.09.2022 passed by the Assistant Commissioner of CGST, Division-II, Bareilly is held as correct, legal and proper.‖
2.1 The appellant is provider of Taxable Service as defined under the Finance Act, 1994 and they are holding Service Tax Registration No. AAGCM9094HSD001. He is providing Storage of warehousing services, Business Aux. Services, GTA Service, Business Support Service and Works Contract Service.
2.2 On the basis of information received from the Income Tax department for the period 2015-16 that appellant have received towards sale of services to Rs.1,27,68,488/-.
2.3 On receipt of said information appellant vide letters dated 04.04.2019, 09.05.2019 and 01.12.2020 were asked to submit reasons for difference found in value of services as per ST-3 and ITR data for the F.Y. 2015-16, 2016-17, 2017-18 (Apr-Jun) along with supporting documents. Appellant vide his letter dated 14.09.2020 submitted a copy of Form 26AS, profit and loss account and agreement dated 10.06.2015 between them and M/s lon Exchange Purified Drinking Water P. Ltd., Mumbai.
2.4 On scrutiny of the documents it was observed that the appellant had received amount against sale of services and declared short taxable amount in the ST-3 returns.
2.5 In addition to the above, appellant have also shown expenses against transportation amounting to Rs.70,04,668 & 38,17,320/- during the FY 2015-16 & 2016-17.
2.6 On the basis of above it was observed that appellant had short paid service tax as detailed in tables below:-
2.7 From the above, it was observed that differential service tax payable by the appellant works out to Rs.32,40,376/- (Rs. 29,84,123/- + Rs.2,56,253/-). However, from the above details available on ACES portal they have discharge service tax liability of Rs.24,36,364/- only vide 24 challans between 07.09.2015 to 06.12.2016 and an amount of Rs. 12,67,972/ has been adjusted against service tax payable shown in the ST-3 Returns filed during the period April 15 to June 2017. After adjusting service tax of Rs.11,68,392/-, excess paid as per ST-3 returns filed, against total differential service tax of Rs.32,40,376/-, net differential service tax comes to Rs.20,71,984/-.
2.8 Though the appellant was filing ST-3 returns, they have suppressed the material information during consideration on account of providing of taxable services and were not paying service tax. Thus, they suppressed the taxable value from the actual receipts against the services with clear intent to evade payment of service tax. Therefore, Section 73 (1) of the Finance Act, 1994 is invokable for making this demand for various grounds appellant is liable to penalty.
2.9 Show cause notice dated 14.12.2020 was issued to the appellant, asking them to show cause as to why:-
―i) Service Tax amounting to Rs. 20,71,984/- (including Cesses), not paid by them, payable on taxable services income received during FY 2015-16, 2016-17, 2017-18 (Apr Jun) should not demanded and recovered from them under the proviso to Section 73 (1) of Finance Act, 1994 read with Section 83 of the Act, and further read with Section 38A of Central Excise Act, 1944 and Section 174 of the Central Goods and Services Tax Act, 2017
ii) Interest on the demand of service tax at the applicable rate should not be recovered from them under them under the provisions of Section 75 of th
