Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 447

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Sanjiv Srivastava, Technical Member
Titco Electricals – Appellant
Versus
Commissioner of Central Excise & CGST – Respondent
Service Tax Appeal No.70063 of 2026

Advocates:
For the Appellants/Petitioners: Manish Kumar Deorah
For the Respondents: A.K. Choudhary

Tax authorities cannot selectively raise demands on contracts previously adjudicated in the assessee's favour without a change in law or facts. Appellate orders must be speaking, reasoned, and must address the substantive evidence and arguments presented by the parties to be legally sustainable.

Headnote:(A) Finance Act, 1994 - Section 73(1A) - Service Tax - Demands for subsequent periods - Consistency in adjudication - Tax authorities cannot be selective in making demands for similar works and contracts identical to those already adjudicated in earlier proceedings unless there is a change in the legal position or factual circumstances. (Paras 4.5 and 4.6)

(B) Appellate Procedure - Speaking Orders - An appellate authority is required to record reasons for its findings and cannot pass an order without considering the material documents placed on record or specifically addressing the grounds raised by the appellant. A non-speaking order setting aside a well-reasoned order of the original authority is unsustainable. (Paras 4.3 and 4.7)

Facts of the case:
The appellant provided engineering and works contract services. The revenue initiated proceedings alleging short payment of service tax for certain periods, despite earlier proceedings for similar contracts having been settled in the appellant's favour. The original adjudicating authority had examined the specific work orders, accepted the applicability of specific exemptions, and the eligibility of abatement, concluding that no short payment existed. The appellate authority reversed this, leading to the current appeal.

Findings of Court:
The court observed that the appellate authority failed to provide a reasoned order or address the arguments raised regarding the consistency of tax treatment for identical contracts. The original order had meticulously analyzed the contracts and exemptions, whereas the impugned order failed to provide any valid justification for its contrary conclusion.

Issues: Whether the appellate authority's order was sustainable given the lack of reasoning and whether the revenue, having dropped similar demands in earlier proceedings for the same contracts, was justified in raising the current demand.

Ratio Decidendi: Judicial and quasi-judicial authorities must maintain consistency in decision-making regarding identical factual scenarios and contracts. Furthermore, an appellate order that ignores evidence and fails to provide a reasoned basis for overturning a detailed original order is legally infirm.

Result: Appeal allowed.

SANJIV SRIVASTAVA:

This appeal is directed against Order-in-Appeal No.118/ST/Appl/Alld/2025 dated 17/07/2025 passed by Commissioner (Appeals) Central Excise & Service Tax, Allahabad. By the impugned order following has been held:-

“6.0 Thus in view of the foregoing, I allow the appeal filed by the appellant department and set aside the Order-in Original No.47/ST/Div-II/Alld/2023-24 dated 30.03.2024 to the extent of dropping of the demand of Service Tax on the amount of Rs. 68,71,058/- received by the appellant as per Table-A given under para 3.1 above alongwith resultant interest and penalty, on the basis of the facts/reasons stated above and remand the matter back to the original Adjudicating Authority for passing legal and proper order in a reasoned manner. The appeal is accordingly, disposed of in above terms.”

2.1 Appellant is registered with the Service Tax Department w.e.f. 26.07.2010 and engaged in providing taxable services under the category of Consulting Engineer Services. They are providing services mainly to M/s Military Engineering Services (MES), Northern Central Railway (NCR), Airport Authority of India (AAI-CATC).

2.2 An inquiry was initiated against the appellant and they were asked to provide information for the period 2010-11 to 2014-15 vide letter dated 23.10.2015. A show cause notice dated 23.10.2015 was issued to the appellant for the period 2010-11 to 2014-15 demanding service tax on the amount allegedly short paid.

2.3 Subsequently, for the period from 2015-16 to 2016-17 again certain information was called for and the appellant provided the information in the form of Form 26AS, Balance Sheet and profit and loss account for the said period along with the copy of challans they also provided work order and bills/invoices raised to the AAI, MES and NCR for the services provided during this period.

2.4 In terms of Section 73(1A) of the Finance Act, 1994 an statement of demand was issued to the appellant in continuation of the earlier show cause notice dated 23.10.2015 for the period in dispute. It was observed that there was difference in the receipts as indicated in the ST-3 records and financial records of the appellant as detailed in table below:-

Financial Year	Gross Receipts as per Balance Sheet (in Rs)	Gross Receipts as per Form 26 AS(in Rs)	Gross Receipts as per. ST-3 returns (in Rs)
2015-16	11336088	11157752	7534806
2016-17	7975581	8070478	7544838

2.5 On the basis of above differences, it was observed that appellant has short paid service tax as detailed in table below:-

Management, Maintenance & Repairs/ works Contract Services provided to AAI,MES, Air Force and NCR (As per Bills & Form 26 AS provided by the party)

Financial Year	Service Recipient	Amount Received (in Rs)	Abatement	Taxable Value (in Rs)	Rate of Service Tax(%)	Service Tax payable (in Rs)	S. Tax paid as per ST 3 Returns (in Rs)	S. Tax short/not paid (in Rs)
2015-16 (01.06.2015 to 14.11.2015)	AAI	2248386	30%	1573870	14	220342	253916	1096947
	NCR	687129	30%	480990		67339
	Garrison Engineers	117227	0	117227		16412
2015-16 (15.11.2015 to 31.03.2016)	AAI	2730646	30%	1911452	14.5	277161
	NCR	222364	30%	155655		22570
	Garrison Engineers	5152000	0	5152000		747040
2016-17 (01.04.2016 to 31.05.2016)	AAI	0	0	0	14.5	0	398341	713570
	NCR	334779	30%	234345		33980
2016-17 (01.06.2016 onwards)	AAI	1669515	30%	1168661	15	175299
	NCR	162119	30%	113483		17022
	Garrison Engineers	4097951	0	4097951		614693
		1806114	0	1806114		270917
TOTAL		19228230		16811749		2462774	652257	1810517

2.6 In the statement of demand appellant was called upon to show cause as to why:-

“(i) The Service Tax (including Ed. Cess and S & H Ed. Cess) total amounting to Rs.18,10,517/- (Rupees Eighteen Laes Ten Thousand Five Hundred Seventeen Only) should not be demanded and recovered from them under proviso to sub Section (1) of Section 73 of chapter V of the Finance Act, 1994 along with interest as applicable under Section 7

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2026 Supreme(Online)(CESTAT) 447

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNALSanjiv Srivastava, Technical MemberTitco Electricals – AppellantVersusCommissioner of Central Excise & CGST – RespondentService Tax Appeal No.70063 of 2026

Tax authorities cannot selectively raise demands on contracts previously adjudicated in the assessee's favour without a change in law or facts. Appellate orders must be speaking, reasoned, and must address the substantive evidence and arguments presented by the parties to be legally sustainable.

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Sanjiv Srivastava, Technical Member
Titco Electricals – Appellant
Versus
Commissioner of Central Excise & CGST – Respondent
Service Tax Appeal No.70063 of 2026