Actual Figures Can Be Considered To Determine Service Tax Payable By Assessee If Books Of Accounts Show Higher Figures Than Statutory Returns: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that actual figures can be considered for determining service tax payable by assessee if books of accounts show higher figures than statutory returns. The Bench of Justices Binu Tamta (Judicial) and P.V. Subba Rao (Technical) has observed that, “If the books of accounts show higher figures than the statutory returns the actual figures can be considered for determining the service tax payable by the appellant. However, before considering the figures in the statutory returns and other records, what needs to be ascertained is whether the figures therein represent the value of the taxable services provided or not.” In this case, the assessee is holding service tax centralized registration during the relevant period to provide a variety of services like work contract services etc. After the implementation of GST, the assessee' registration was converted into a GST registration. It was found by the audit that the assessee had short paid service tax duty wrong availment of payment for works contract service and short paid service tax under reverse charged mechanism due to wrong availment of abatement on works contract services received by it. The Principal Commissioner confirmed the demand of service tax and cenvat credit. Aggrieved by the decision of Principal Commissioner, the assessee filed an Appeal before Commissioner (Appeals). The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal. The assessee contended that it had not only provided taxable service but had also other transactions and the figures in its financial accounts reflected the total. Also, the actual value of taxable services provided were made available to the audit party during audit. Whereas it was contended by the department that the documents received on WeChat revealed that the importer had indulged in suppressing actual invoices depicting the correct transaction value of the goods in order to evade proper duties, and presented fabricated invoices for customs clearances, having lower values for evasion of customs duty. The Tribunal accepted the contention of the assessee that it had not only provided taxable service but had also other transactions and the figures in its financial accounts reflected the total. Therefore, they cannot be taken as representing the value of the taxable services provided only. “From the impugned order it cannot be established that the entire figures indicated in the commercial accounts reflected only the value of taxable services provided by the assessee”, added the Bench. In view of the above, the Tribunal partly allowed the appeal and upheld the reversal of CENVAT credit and remanded the matter to the Commissioner. Counsel for Appellant/ Assessee: P.K. Sahu Counsel for Respondent/ Department: Anand Narayan Case Title: Kalpakaaru Projects Pvt Ltd v. Principal Commissioner, CGST-Delhi South Case Number: Service Tax Appeal No. 50302 OF 2022 Click Here To Read/Download The Order

Actual Figures Can Be Considered To Determine Service Tax Payable By Assessee If Books Of Accounts Show Higher Figures Than Statutory Returns: CESTAT

Mehak Dhiman

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