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CST, Delhi V/S Resolution Capital & Global Pvt. Ltd.

Company & Directors' Information:- L & T CAPITAL COMPANY LIMITED [Active] CIN = U67190MH2000PLC125653

Company & Directors' Information:- B N GLOBAL PRIVATE LIMITED [Active] CIN = U15400PB2014PTC038543

Company & Directors' Information:- B. P. CAPITAL LIMITED [Active] CIN = L74899DL1994PLC057572

Company & Directors' Information:- B. P. CAPITAL LIMITED [Active] CIN = L74899HR1994PLC072042

Company & Directors' Information:- H AND W CAPITAL PRIVATE LIMITED [Active] CIN = U67120DL1998PTC092955

Company & Directors' Information:- K V GLOBAL PRIVATE LIMITED [Active] CIN = U24100DL2014PTC263567

Company & Directors' Information:- GLOBAL CORPORATION LIMITED [Active] CIN = L74999DL1992PLC048880

Company & Directors' Information:- K M CAPITAL LIMITED [Active] CIN = L65910DL1992PLC048421

Company & Directors' Information:- R. L. CAPITAL PRIVATE LIMITED [Active] CIN = U17120MH1992PTC066895

Company & Directors' Information:- GLOBAL CAPITAL LIMITED [Active] CIN = U74899DL1994PLC060911

Company & Directors' Information:- T & I GLOBAL LTD. [Active] CIN = L29130WB1991PLC050797

Company & Directors' Information:- K G GLOBAL PRIVATE LIMITED [Active] CIN = U74999DL2000PTC104788

Company & Directors' Information:- A. V. GLOBAL CORPORATION PRIVATE LIMITED [Active] CIN = U63090DL2007PTC159315

Company & Directors' Information:- A. K. CAPITAL CORPORATION PRIVATE LIMITED [Active] CIN = U65993MH2006PTC165749

Company & Directors' Information:- P H CAPITAL LIMITED [Active] CIN = L74140MH1973PLC016436

Company & Directors' Information:- A N GLOBAL LIMITED [Active] CIN = U92110MH1985PLC035269

Company & Directors' Information:- D S GLOBAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071516

Company & Directors' Information:- RESOLUTION CAPITAL GLOBAL PRIVATE LIMITED [Under Liquidation] CIN = U45400DL2008PTC175099

Company & Directors' Information:- A B C GLOBAL PRIVATE LIMITED [Active] CIN = U51909PB2011PTC035103

Company & Directors' Information:- I B CAPITAL PRIVATE LIMITED [Active] CIN = U65993GJ2011PTC065780

Company & Directors' Information:- I 5 CAPITAL PRIVATE LIMITED [Active] CIN = U65990TN2015PTC101551

Company & Directors' Information:- P D GLOBAL CAPITAL LTD [Active] CIN = U70101WB1996PLC079404

Company & Directors' Information:- I A T GLOBAL COMPANY PRIVATE LIMITED [Active] CIN = U24116DL1997PTC084916

Company & Directors' Information:- J D GLOBAL PRIVATE LIMITED [Active] CIN = U51909DL1997PTC091270

Company & Directors' Information:- B N G GLOBAL INDIA LIMITED [Active] CIN = U52590DL2011PLC225377

Company & Directors' Information:- S E R CAPITAL PRIVATE LIMITED [Active] CIN = U65921MH1998PTC116812

Company & Directors' Information:- N K COMPANY (GLOBAL) PRIVATE LIMITED [Active] CIN = U52390WB2010PTC153624

Company & Directors' Information:- K B K GLOBAL PRIVATE LIMITED [Active] CIN = U24296DL2016PTC290487

Company & Directors' Information:- P. K. A. CAPITAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC074137

Company & Directors' Information:- M & D GLOBAL PRIVATE LIMITED [Active] CIN = U31101UP1974PTC003937

Company & Directors' Information:- R S N CAPITAL PRIVATE LIMITED [Strike Off] CIN = U65924HR2012PTC045875

Company & Directors' Information:- A J CAPITAL LIMITED [Active] CIN = U74899DL1995PLC072149

Company & Directors' Information:- V R GLOBAL PRIVATE LIMITED [Active] CIN = U45200WB2007PTC120797

Company & Directors' Information:- M M GLOBAL PRIVATE LIMITED [Strike Off] CIN = U29120WB1986PTC041280

Company & Directors' Information:- R V GLOBAL PRIVATE LIMITED [Active] CIN = U74990MH2009PTC195301

Company & Directors' Information:- M M C GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U11200MH2010PTC206910

Company & Directors' Information:- S R GLOBAL PRIVATE LIMITED [Strike Off] CIN = U51109WB1997PTC084553

Company & Directors' Information:- H V GLOBAL PRIVATE LIMITED [Active] CIN = U18101DL2000PTC103960

Company & Directors' Information:- R P GLOBAL PRIVATE LIMITED [Strike Off] CIN = U74990MH2009PTC193409

Company & Directors' Information:- M S GLOBAL PRIVATE LIMITED [Active] CIN = U70100MH2008PTC213273

Company & Directors' Information:- R S V GLOBAL LIMITED [Strike Off] CIN = U51909DL1994PLC059032

Company & Directors' Information:- CAPITAL LTD [Active] CIN = U65993WB1956PLC001592

Company & Directors' Information:- T AND T CAPITAL PRIVATE LIMITED [Active] CIN = U67120TG2020PTC142533

Company & Directors' Information:- N B GLOBAL (INDIA) PRIVATE LIMITED [Active] CIN = U15122UP2012PTC051614

Company & Directors' Information:- M R CAPITAL PRIVATE LIMITED [Active] CIN = U65921DL1996PTC075492

Company & Directors' Information:- M G M CAPITAL LIMITED [Strike Off] CIN = U67120RJ1995PLC009482

Company & Directors' Information:- J L CAPITAL PRIVATE LIMITED [Strike Off] CIN = U67120DL1996PTC079840

Company & Directors' Information:- A M GLOBAL PRIVATE LIMITED [Active] CIN = U74999MH2015PTC261061

Company & Directors' Information:- L S A GLOBAL INDIA PRIVATE LIMITED [Under Process of Striking Off] CIN = U74900TG2015PTC098308

Company & Directors' Information:- R L GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U52300HP2014PTC000764

Company & Directors' Information:- G R GLOBAL PRIVATE LIMITED [Active] CIN = U70102KA2013PTC069586

Company & Directors' Information:- H. E. GLOBAL PRIVATE LIMITED [Active] CIN = U72901GJ2016PTC092866

    Appeal No. ST/55621/2014-DB (Arising out of Order-in-Original No. 19/SA/CCE/ST/2014 dated 14.07.2014 passed by the Commissioner, Central Excise, Commissionerate, Delhi-III, Gurgaon) and Final Order No. 52246/2018

    Decided On, 14 May 2018

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, MEMBER

    For Petitioner: Ranjan Khanna, D.R. And For Respondents: Venu Gopal Nair, C.A.

Judgment Text

1. The present is an appeal by the department against the Order-in-Original No. 19/SC/CCE/ST/2014 dated 14.07.2014 passed by the Commissioner, Central Excise, Commissionerate, Delhi-III, Gurgaon.

2. The facts in brief for the purpose are that an Anti-Evasion branch of Service Tax, Commissionerate, Delhi got an information about the noticee/respondent herein, being one of the firms of M/s. Mukher Group of Companies, to be engaged in Management Consultancy Services and Management Maintenance or Repair Services, but was not discharging their Service Tax liability. Various letters were issued to the noticee, and finally the summons to furnish data/documents were served upon him. But the noticee or the respondent failed to comply with the same except for providing some incomplete copies of balance-sheets for the years 2008-09 and 2009-10. In absence of any information/data/document to have been provided by the noticee or the respondent, the department gathered the information about their income for the year 2007-08 to 2009-10 from the Registrar of Companies, Ministry of Corporate Affairs, Government of India, which had shown the income under the head management and agency. The same being taxable, however, in the absence of any information about the precise amount to be levied with, the best judgment provision as prescribed under Section 72 of the Finance Act 1994 was invoked.

3. Accordingly, a Show Cause Notice dated 23.04.2013, was issued for the period 2007-08 to 2011-12, demanding the Service Tax to the tune of Rs. 32,62,52,414/- in view of Section 73 of the Finance Act, 1994 along with interest under Section 75 of the Act, and the proposed penalties under Section 76, 77 and 78 of the Act. Proceedings initiated vide the said Show Cause Notice were completely dropped by the Commissioner vide the order under challenge. We have heard both the parties herein, where it is submitted on behalf of the department that despite demand, the respondent has failed to provide complete and relevant information, no evidence was ever produced by the respondent about his company to have been wound up. The company was rendering a Management Consultancy Services and Management Maintenance or Repair Services, being very much taxable in view of Section 65(105)(R) and Section 65(105)(ZZG), respectively, of Finance Act, 1994. Still the noticee/respondent was not registered with the Service Tax. While impressing upon Para 5.3 and 5.4 of the impugned appeal, the appellant department has prayed for appeal to be allowed and the demand of Service Tax of Rs. 32,62,50,440/- as raised in the Show Cause Notice to be the declared as legal and justified.

4. While rebutting these arguments, it is mentioned on behalf of the noticee/respondent that the Show Cause Notice has been issued on the basis of mere presumption, conjectures and surmises as the information concerned was obtained by the department while investigating Ms. Mukhar Group of Companies. Though the company under the name of M/s. Resolution Capital and Global Pvt. Ltd. got incorporated in the year 2007, but it did not conduct any business, and finally wound up its operations. It is impressed upon that Show Cause Notice itself corroborates the same where it is recited that during investigation, when the premises of respondent were visited, a meager staff of three females with no knowledge about the conduct of business of the company was found available. The respondent has also relied upon the order of Delhi High Court dated 14.03.2014 admitting the winding up of the respondent's company. The affidavit of the respondent himself is also impressed upon where he asserted to have no bank account apart from the one with Union Bank of India, that too, for a period 01.03.2010 to 08.01.2014, showing that no income was ever incurred. As a result, there arises no question of the assessment in question as against the respondent. The proceedings of the Show Cause Notice have rightly been dropped by the Commissioner. The appeal is accordingly prayed to be rejected.

5. To a query from the Bench, the learned Chartered Accountant representing the Respondent admitted that they have not responded to the letters received from Revenue, seeking details. He also requested that the Respondent may be permitted to submit a certificate from the Chartered Accountant to the effect that during the period of demand, no service was rendered and no consideration was received, and also that the records of the Registrar of companies for the said period is reflecting incorrect picture.

6. After hearing both the sides at length and perusing the entire record of the present appeal, we are of the considered opinion as follows:

(i) The Commissioner of Central Excise has dropped the proceedings under the Show Cause Notice dated 23.04.2013 on the following grounds:

• 26AS - Generated from Income Tax web site does not indicate any revenue or tax.

• The bank statement does not show any receipt except a deposit from a group company -

• Use of term consolidated while preparing financial statements

Though exaggerated figures to show a healthy financial picture of the company

• May be case of making up of books

But there was no revenue generated by the notice as alleged in SCN

• Revenue has proceeded purely on the basis of data uploaded on site of MCA and information provided by the complainant

• Revenue was unable to procure any financial document from ROC or ITAX Department to substantiate the allegation that noticee earned revenue to the tune as alleged in SCN

• Unless revenue is able to prove that noticee generated revenues as alleged in SCN legal provisions quoted cannot be invoked by revenue which has to first establish that the noticee earned service income as alleged, which revenue failed miserably to do.

• Documents placed on record by the notice, show it did not generate any service income.

(ii) The admitted facts in the case are that respondent's company got incorporated in the year 2007 to render the Management Services and Management, Maintenance and Repair Services duly taxable under Section 65(105)(R) and 65(105)(ZZG) of the Finance Act. Subsequent admission is that the company was never got registered under Service Tax. Once the company was incorporated with the only object of rendering such services as invite the Service Tax liability, there can be no justified reason for still not applying for registration under Service Tax immediately after the incorporation.

(iii) The Commissioner has failed to appreciate the same, rather has observed that the Income Tax Returns, as generated from the Income Tax Department's site, does not indicate any revenue or tax. The Commissioner has failed to appreciate that there is document/data provided about the balance sheets of the respondent's company for continuous three years, that is, 2008-09, 2009-10 and 2010-11 as was provided by the Registrar of the Company.

(iv) Further, it is also on record that despite the summons being issued to the respondent to provide the complete details of his business for the period in question to the department, he failed to supply the complete data.

(v) Under Section 72 of the Finance Act, the Central Excise Officer may require any person to produce such accounts, documents or other evidences as he may deem necessary, and in case the person who otherwise is liable to pay Service Tax in view of Section 70 of the Act, fails to provide such an officer can apply the best judgment assessment.

(vi) The Commissioner has miserably failed to appreciate the conduct of the respondent while not obeying the Excise Officer, who was discharging his duty under the prescribed law. The mere affidavit of the respondent that he had no bank account except the one since the year 2010-14, is highly insufficient to prove that there were no transactions by the respondent's company during the period in question, i.e., with effect from 2007 till the year 2011 or till the said account was got opened. It was incumbent upon the noticee/respondent to produce the details of the bank account which his company maintained since the incorporation in the year 2007.

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/> 7. In spite of our observations in the above paragraphs, we are of the view that the Respondent should be allowed one more opportunity to prove that no service was rendered and no consideration was received during the period covered by the Show Cause Notice and that the record of ROC is not correct. The learned representative of the Respondent offered to submit a CA's certificate to this effect. To facilitate submission and consideration of such a certificate, we set aside the impugned order and remand the matter to the adjudicating authority for a de novo decision. The adjudicating authority will pass such orders after considering the CA's certificate as above, if produced before him. The Respondent is directed to produce such a certificate before the adjudicating authority within a period of three months from the date of this order, failing which the de novo decision must be completed without such a certificate.