The Hon’ble Bench of CESTAT Ahmedabad vide its order dated 18.01.2024 in the matter of Brijesh Ajitbhai Oza Vs. Commissioner of Central & Service Tax – CGST & Central Excise Rajkot in Service Tax Appeal No. 10654 of 2023 – SM, observed that the Appellant was engaged in full-time services with M/s. Cairn Energy India Ltd at Balmer office in Rajasthan, the taxable services if any is also provided at Balmer in Rajasthan.  However, the Demand of Service tax is confirmed by Order of Assistant Commissioner, Bhavnagar-I, who has no jurisdiction to demand tax at Balmer in Rajasthan.  Therefore, it was held by the Hon’ble Bench that the demand of Service Tax is without jurisdiction and consequently, the impugned order is liable to be set aside.

The Appellant filed the appeal before the Hon’ble CESTAT assailing the Order-In-Appeal No. BHV-EXCUS-000-APP-264-2023 dated 27.07.2023 passed by the Commissioner (Appeals) of GST and Central Excise, Rajkot by which service tax demand of Rs. 4,40,838 under section 73 (1) of the Finance Act, 1994 has been upheld.

Facts of the case are that the appellant is engaged in full-time service with M/s. Cairn Energy India Ltd at its Balmer (Rajasthan) office as “Consultant – Logistic Services’. It is the case of department, based on Income tax returns/Data accessed from the Income Tax Department, that appellant provided the taxable services and received income of “consultant – Logistic Services” from the above entity during the period 2014-15 up to June 2017, however failed to obtain service tax registration and pay service tax thereon.

Appellant’s Submissions: –

• It was strongly argued on the behalf of the Appellant that in first place, the  Assistant Commissioner, Bhavnagar-I had no jurisdiction to demand service tax for services if any provided at Balmer in Rajasthan. 
• To support its contention, reliance was placed on the decisions of Supermax Personal Care P. Ltd Vs. Union of India – 2021 (377) E.L.T 399; B. L. Mehta Construction Co. P. Ltd Vs. CST- 2018 (8) G.S.T.L 92; Transocean Offshore Vs. Union of India – 2017 (356) E.L.T 45 (AP).
• It was further submitted that show cause notice is barred by limitation provided under proviso to section 73 (1) of the Act and the only basis for invoking extended period in the show cause notice is that appellant failed to obtain registration and pay service tax which cannot be equated with wilful suppression of facts. Reliance was placed on: – Collector of central Excise Vs. Chemphar Drugs & Liniments – 1989 (40) E.L.T 276 (S.C.); Commr. Of Service Tax, Bangalore-I Vs. Karnataka Udyog Mitra – 2020 (35) G.S.T.L. 382 (Kar.); Padmini Products Versus Collector of C. Ex. – 1989 (43) E.L.T. 195 (S.C.).
• Referring to his Employee ID card; Health Insurance Card; Awards, it was submitted that the appellant was under a bonafide that his engagement with his employer is not subjected to service tax and that he was treated as employee during the period in question and hence element of “service” as per the provisions of Finance Act are absent.

On the other hand, it was submitted on the behalf of the revenue that the income of the Appellant was booked in Form 26AS under section 194J of the Income Tax Act which denotes fees for professional or technical services.  Further, the department came to know about such services provided only by way of access of Data/Returns from Income Tax Department and hence extended period is rightly invoked.

Held: –

• The Hon’ble Bench after considering the submissions made and facts of the case, found that the appellant was engaged in full-time services with M/s. Cairn Energy India Ltd at Balmer office in Rajasthan, the taxable services if any is also provided at Balmer in Rajasthan.
• Further, the demand of Service tax is confirmed by Order of Assistant Commissioner, Bhavnagar-I who has no jurisdiction to demand tax at Balmer in Rajasthan.
• The Hon’ble Bench referring to the decision of L. Mehta & Co., wherein it was held that ‘In this case, at the time of the execution of work, the appellant was not registered with the Central Excise/Service tax department. In that circumstance, the jurisdiction falls where the appellant has executed the work.’ held that the demand of service tax is without jurisdiction. Therefore, the impugned order is liable to be set aside.

The Hon’ble Bench with the above observations and findings, set aside the impugned order and allowed the appeal with consequential appeal.