Service tax demands cannot be raised solely on the basis of discrepancies in income tax data (Form 26AS/ITR) without independent verification, and the extended period of limitation cannot be invoked without proving positive evidence of fraud or suppression of facts with an intent to evade tax.

The present appeal is directed against the impugned order dated 21.12.2023 passed by the Commissioner (Appeals), CGST, Chandigarh dismissing the appeal of the appellant and upheld the Order-in-Original dated 13.03.2023 and confirmed the demand of service tax of Rs. 97,954/- under Section 73, interest under Section 75 and penalties under Section 77 & 78 of the Finance Act, 1994.

2. Briefly the facts of the present case are that the appellant is working as an actor in television serials has been regularly filing ST-3 returns and paying service tax on receipt basis. During the financial year 2014-15, the appellant provided acting services exclusively to M/s. Shashi Sumeet Productions Private Limited, Mumbai and the said Production House deducted TDS on the professional fees paid to the appellant. The Department, on the basis of third-party information received from the Income Tax Department, observed a discrepancy between: (a) Gross receipts of Rs. 31,83,580/- reflected in the appellant's ITR, and (b) Rs. 23,91,070/- reflected in the ST-3 returns and on the basis of this discrepancy, a demand of Service Tax of Rs. 97,954/- was raised by way of issuance of show cause notice dated 25.11.2020 invoking the extended period of limitation under the proviso to Section 73(1) on the ground of alleged suppression; by following the due process, the adjudicating authority vide Order-in-Original dated 13.03.2023 confirmed the demand and aggrieved by the said order, the appellant filed the appeal before the Commissioner (Appeals) who vide impugned order dismissed the appeal of the appellant. Hence, the present appeal.

3. Heard both the parties and perused the material on record.

4. The learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents. The learned Counsel for the appellant further submits that the Order-in-Original dated 13.03.2023 has been passed in gross violation of the mandatory time limit prescribed under Section 73(4B) of the Finance Act, 1994, thereby, rendering the entire proceedings time-barred and non est in law. The learned counsel further submits that in the present case, the show cause notice was issued on 25.11.2020 and statutory deadline for adjudication on 24.11.2021, whereas Order-in-Original was passed on 13.03.2023 which is beyond the statutory limit of approximately 15 months beyond the statutory deadline. He further refer to CBIC instruction which are binding on the adjudicating authority, whereby the CBIC vide instruction bearing F.No. 280/45/2015-CX dated 17.09.2015 has directed the field formation to pass adjudication orders within time limits as prescribed under the Central Excise Act, 1944 and Finance Act, 1994. The learned counsel also refer to the certain judgments holding that Circulars are binding upon all the field formation and the adjudicating authority and the impugned order passed beyond the statutory deadline is liable to be set aside.

4.1 The second ground raised by the learned counsel for the appellant is that in this case, the Department has raised the demand by invoking the extended period of limitation under proviso to Section 73(1) which can only be invoked where there is a positive evidence of fraud, suppression of facts, willful mis-statement, or deliberate contravention with intent to evade payment of service tax, whereas in the present case, none of these elements is present because the appell