2025-VIL-1021-CESTAT-CHD-ST

SERVICE TAX CESTAT Cases

Service Tax – Goods Transport Agency service, Best judgment method – Appellant was engaged in providing GTA service to various companies & transporters – Demand of service tax on account of short payment of tax due to mismatch between its ST-3 and IT returns, by invoking extended period of limitation – Adjudicating authority confirmed demand along with interest and penalty – Whether demand raised on basis of difference between ST-3 and IT returns is sustainable – HELD - The Show cause notice was issued proposing demand of service tax on account of short payment of tax due to mismatch between ST-3 and 26AS/ITR returns by invoking extended period of limitation – Appellant filed reply to show cause notice, but same was not considered by original authority – Order-in-Original was passed ex-parte on ground that Appellant did not file reply to show cause notice and did not attend personal hearing, which is factually incorrect, because Appellant did not get personal hearing notice from Respondent – It is a settled law that demand cannot be raised solely on basis of difference between ST-3 and 26AS/ITR, hence, on this issue alone, demand is liable to be set aside – Suppression cannot be alleged by Department on part of Appellant in order to invoke extended period of limitation – Most of companies to whom Appellant has rendered services are body corporates and therefore, service tax cannot be demanded from appellant as the liability to pay service tax in such cases will be on the body corporate receiving GTA service by way of RCM – Further, the Department has wrongly applied best judgment method for computation of demand. Once, the appellant has duly filed the ST-3 returns during the relevant period, the question of invoking the best judgment method is not warranted - Impugned order being not sustainable in law on merits as well as on limitation is set aside – The appeal is allowed

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