FASCEL LTD. Vs. COMMISSIONER OF S.T., AHMEDABAD

JUDGEMENT

(1.) THE appellants are engaged in providing telephone services. Noticing that the appellants paid the service tax on lower amount than the income shown in the profit and loss account of the appellant -company during the financial year 2002-2003 and 2003-2004, a show cause notice was issued on l6-10-07 demanding service tax of Rs. 7,92,29,929/-. During the adjudication proceedings, the Commissioner agreed with the contention of the appellant that the income in the profit and loss account comprised of different sources and all of them are not liable to service tax; he also agreed with the assessees contention that the substantial portion of demand related to the amount accrued for providing services but consideration for the services not received and on these grounds the substantial amount of demand was dropped. It was found that the appellants were liable to Rs. 97,387/- which has been confirmed with interest as applicable. Further, penalty of Rs. 200/ - per day under Section 76 of Finance Act, 1994, Rs. 97,387/- under Section 78 of Finance Act, 1994 have been imposed.

(2.) SHRI Sandeep Sachdeva, learned Chartered Accountant on behalf of the appellant submitted that no investigation or verification was conducted by the Revenue and merely based on the fact that the actual income shown in the profit and loss account was more than the value of services provided by the appellant for the purpose of payment of service tax, show cause notice was issued, that too after more than 3 years/4 years. It is his submission that the annual report and profit and loss account are public documents and therefore on the ground of limitation, the whole demand has to be set aside. He relies on the following decisions of the Tribunal in support of his contention :

(3.) FURTHER , he also submits that because of rounding of and other minor accounting problems and also by following accounting principles, in reality, there was excess payment in one year and there was short payment in another year. The excess payment has been ignored but amount short paid has been demanded. The very fact that there was excess payment in one year and there was short payment in another year supports the case of the appellant that there was no suppression/misdeclaration/fraud etc to invoke extended time. Further, the turnover of the company in the year 2002 -2003 was about Rs. 383 crores, in the year 2003 -2004 it was more than Rs. 536 crores and the appellants have paid the service tax on amount of more than Rs. 370 crores in 2002 -2003 and on more than Rs. 445 crores in 2003 -2004, whereas the amount of service tax short paid, that too, after ignoring the excess amount, is Rs. 97,387/ - which again supports the case of the appellant that there was no intention to suppress/mis -declare facts to evade payment of service tax.