Order Date – 30 January 2024

Parties: M/s J M Manpower & Security Pvt. Ltd. Vs Commissioner of Central Excise & Service Tax, Lucknow

Facts –

• The Appellant, M/s J M Manpower & Security Pvt. Ltd., is providing Security Agency Services. A show cause notice was issued by invoking extended period of limitation for the F.Y 2009-10 proposing demand for Service tax, interest and imposition of penalty on the ground that Revenue from operations is lower than the amount shown in ST-3 Returns.
• The appellant submitted that the Revised Balance Sheet for F.Y 2009-10 has been duly audited was not taken into consideration by the Adjudicating Authority.

Issue – 

• Whether the order passed without considering the Revised Balance Sheet for F.Y 2009-10 is valid?

Order –

• The Tribunal observed that  it has been held in a catena of decisions that without any evidence, only the amount received by the Appellant was liable to Service Tax, amounts reflected in Balance Sheet cannot be used to determine the Service Tax liability.
• The Hon’ble Madras High Court in Firm Foundations and Housing held that the reporting of income in the P and L is irrelevant for the purposes of determination of service tax payable and thus the basis of the impugned assessment is erroneous. Moreover, income reflected in the Balance Sheet is for Income Tax purposes, which cannot be used for the purpose of service tax without any corroboratory evidence as also supported by Luit Developers.
• Further the Appellant is a Private Limited Company and therefore the Profit/Loss Account and Balance Sheet is a public document accessible from Registrar of Companies website. Therefore, no suppression can be alleged to invoke the extended period as held in Hindalco Industries Ltd. The Department has not adduced any positive evidence to show malafide intention for  evasion of service tax and therefore extended period is erroneously invoked as held in Pushpam Pharmaceuticals Limited.
• Accordingly, the appeal is partly allowed by uphelding the  interest demand for normal period  of limitation, i.e. for the period from October, 2012 to March, 2013 and rest is set aside.