CESTAT Quashes SCN Issued Against Fruit Seller Not Engaged In Any Service Tax Leviable Activity
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed the show cause notice issued against fruit sellers who are not engaged in any service tax-leviable activity.
The bench of Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member) has observed that the show cause notice did not establish that the appellant was providing any service. The show cause notice was sent to some address in Navi Mumbai, whereas the appellant is conducting his business at Dombivli, Thane, which is a place different from Vashi, Navi Mumbai. Therefore, the appellant neither received the show cause notice nor the order till such time the appellant made a request to provide it somewhere in November 2022. The activity carried out by the appellant was the sale of fruits, which is covered by entry (e) under Section 66D of the Finance Act, 1994, which deals with negative lists.
The appellant/assessee is a fruit seller and is not engaged in any activity on which service tax is leviable and, therefore, did not obtain Service Tax registration. On the basis of data received from the Central Board of Direct Taxes, a show cause notice was issued to the appellant at an address in Vashi, Navi Mumbai. The show cause notice stated that the nature of services provided by the appellant were not covered under the negative list. Certain information was called from the appellant, and data was received from the appellant, and, therefore, service tax paid by the appellant was treated as zero, and by invoking the provisions under Section 72 of the Finance Act, 1994, the best judgment method was adopted, and service tax payable by the appellant for the period from April 2015 to June 2017 was estimated at around Rs. 6,00,000, and the same was demanded from the appellant.
The original order was passed ex parte, the demand was confirmed, and penalties were imposed. The original order was also sent to the Vashi, Navi Mumbai address. When the inquiries were initiated for recovery, the appellant came to know about the passing of the order, and he sent a communication requesting to provide certified copies of the order and informed the officer of revenue that the appellant was out of the ambit of service tax taxation and, therefore, not in a position to make a pre-deposit of 7.5% of the confirmed demand for filing an appeal.
The assessee filed the appeal before the Commissioner (Appeals), informing the learned Commissioner (Appeals) that his correct address was 42, Janubhau Smruti Chawl, Din Dayal Road, Near Bedekar Galli, Thakurwadi-1, Dombivli (West), Thane 421202.
The Commissioner (Appeals) has rejected the appeal filed before him as time barred.
The assessee contended that the appellant neither received a copy of show cause notice nor received a copy of the order since both of them were sent to an address in Vashi, Navi Mumbai, and on filing an application, the appellant received certified copies of the order and filed an appeal before the Commissioner (Appeals) after making a pre-deposit on 24.11.2022. The appellant is a fruit seller, and the show cause notice did not establish that the appellant was providing any service to anybody, which was leviable to service tax. The sale is covered by a negative list at entry (e) of Section 66D of the Finance Act, 1994, and the activity of trading of goods is beyond the jurisdiction of levy of service tax.
The tribunal, while allowing the appeal, held that the department did not have any jurisdiction to issue any show cause notice demanding service tax from the appellant.
Counsel For Appellant: Ashwini Kumar
Counsel For Respondent: A.K. Srivastava
Case Title: Surendra Gundu Shetty Versus Commissioner of Cen. Excise & ST, Belapur
Case No.: Service Tax Appeal No. 85378 of 2024