2026-VIL-1761-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Liability to pay service tax on transportation of goods by road under reverse charge - Appellant rendered transportation of goods by road service to four body corporates, and the consignment notes and bills specifically mentioned that the service tax was to be paid by the recipients, who also gave declarations that they had discharged service tax on RCM basis - Principal Commissioner confirmed the demand under GTA service on the Appellant - Whether the Appellant is liable to pay service tax on the transportation service when the recipients paid the freight and fall within the categories mentioned in the Notification - HELD - As per the Notification No. 30/2012-ST, dated 20.06.2012, in respect of transportation of goods by road, the liability to pay service tax is on the person who pays the freight, if the receiver falls within any of the categories mentioned therein including a body corporate. The recipients paid the freight and are body corporates, and therefore they are liable to pay service tax on RCM basis. Demanding service tax from the Appellant again would amount to double taxation on the same amount - The demand of service tax along with interest is set aside.rnrn^Validity of demand based on ITR data received from Income Tax Department - Show Cause Notice was issued on the entire amount shown in the ITR data without mentioning any particular service provided by the Appellant, and without any investigation carried out by the Department - Whether service tax can be charged on the turnover shown in the ITR without verifying the nature of service rendered - HELD - The notice alleged non-payment of service tax on the entire amount shown in ITR irrespective of the nature and character of services. Service tax cannot be charged on the turnover shown in the ITR without verifying whether the Appellant has rendered any taxable service or not. There must be a specific allegation with reference to the nature of service rendered - The demand based on the ITR data is not sustainable.rnrn^Invocation of extended period of limitation where demand is raised on the basis of ITR data - Appellant was registered under the Finance Act, 1994, and the demand was raised on the basis of ITR data received from the Income Tax Department - Whether the extended period of limitation is invocable in the absence of suppression - HELD - As the demand was raised on the basis of ITR received from the Income Tax Department, there cannot be any allegation of suppression of any fact by the Appellant with intent to evade payment of service tax - The demand of service tax confirmed by invoking the extended period of limitation is not sustainable.rnrn^Non-compliance with pre-show cause notice consultation - Board instruction made pre-show cause notice consultation mandatory by the Principal Commissioner or Commissioner prior to issue of show cause notice in cases involving demands above the specified threshold, except preventive or offence related notices - Show Cause Notice was issued without such consultation - Whether the order is liable to be set aside for non-compliance with the instruction - HELD - The instruction for conducting consultation by the adjudicating authority with the assessee prior to issue of the notice is mandatory, and the case of the Appellant does not fall within the exclusion provided in the instruction. This is an important step towards trade facilitation and promoting voluntary compliance and to reduce the necessity of issuing show cause notice. Since the notice was issued without pre-consultation, the impugned order is liable to be set aside on this ground also, as held by the High Court.rnrn^Imposition of penalties under Sections 77 and 78 of the Finance Act, 1994 - Penalty was imposed under Section 78 along with a penalty under Section 77 for violation of provisions under Section 70 - Whether penalty is imposable when the demand of service tax is not sustained and no suppression is established - HELD - As the demand of service tax is not sustained and no suppression of fact is established, no penalty is imposable on the Appellant under Section 78 - The penalty under Section 78 is set aside, while the penalty imposed under Section 77 for violation of provisions under Section 70 is upheld and the appeal is disposed of accordingly.
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