Order date – 16 August 2022

Facts – 

• The appellant, M/s Balajee Machinery, is a proprietorship firm registered with the Service tax authorities under the category of Clearing and Forwarding Agent Services. The Appellant has filed the service tax return up to the Financial Year 2014-15. 
• The figures appearing in the database of Income Tax Department were compared with the figures furnished in the service tax ST-3 Returns and those appearing in the profit and loss account. A Show Cause Notice dated 19.04.2018 (SCN) was issued.
• Demand of Rs.3,09,59,486/- was confirmed and penalty of equal amount was imposed. Also, penalties for delayed filing of return Rs.1,07,700 u/s 7C of Service Tax Rules and Rs.10000/- U/s 77 (1) of the FA 1994 for non-production of documents called for by the Central Excise Officer also imposed.
• Aggrieved the appellant filed an appeal.

Issue – 

• Whether the demand and penalty imposed on the appellant is justifiable and whether invocation of extended period of liability is sustainable?

Order – 

• The Tribunal observed that the Appellant was duly audited by the Service Tax Department for the compliance up to the Financial Year 2013-14. Since the records have been duly audited, the demand cannot be raised for the same period on account of change in the opinion. 
• Relying on the case of Pappu Crane Services vs. CCE, Lucknow the co-ordinate Bench of Tribunal at Allahabad held that where the demand is merely based on the data appearing in the Income Tax Portal, there cannot be said to any fraud or suppression so as to justify invocation of extended period of limitation.
• Finally, the demand pertaining to the Financial Year 2015-16 and 2016-17 is concerned, the Tribunal viewed that by considering the reconciliation statements and the Chartered Accountant Certificate and VAT returns submitted by the Appellant, there is no occasion to sustain the demand as raised in the impugned order. 
• The order was set aside and appeal allowed.