The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no penalty is imposable for non-filing of nil return.

The bench of P.K. Choudhary (Judicial Member) has observed that filing of return is not required if service tax liability is NIL. Hence, imposition of penalty for not filing returns by the Appellant who was not providing taxable service is unjustified. 

The Appellant/assessee was a service provider engaged in providing “Works Contract Service‟ i.e. Erection, Commissioning and Installation services of boiler, ESP etc. 

The Appellant was registered as service tax assessee during pre-GST era and was paying service tax on the services rendered by him. On the basis of information received from the Income Tax Department under third party information policy, it was found that total consideration received by the Appellant, during 2014-15, was Rs.57,68,440/- but the Appellant had not paid service tax during the said period. 

The Department, therefore, issued Show Cause Notice for demand of service tax on the amount treating the said amount as value of taxable services rendered during 2014-15. The demand was raised along with interest and penalty.

The Show Cause Notice was adjudicated by the Assistant Commissioner, CGST confirming the demand of service tax along with interest and penalty. The Appellant filed an appeal before the learned Commissioner (Appeals), CGST, Meerut against the impugned Order-in-Original and contended that the whole value declared in Income Tax return during 2014-15 was considered as taxable value without any investigation. 

The petitioner contended that the Appellant had sold goods during the period on which no service tax was leviable but service tax was demanded thereon. The Commissioner (Appeals), however, upheld the order of the lower authority with partial modification in the amount of demand for late fees.

The tribunal held that no penalty is imposable for non-filing of NIL return.

Case Details

Case Title: M/s S. I. Enterprises Versus Commissioner of Central Excise & CGST, Meerut

Case No.: Service Tax Appeal No.70081 of 2024

Date: 06.01.2025

Counsel For Petitioner: Stuti Saggi

Counsel For Respondent: Manish Raj