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2013 (7) TMI 182 - AT - Service TaxTaxability of free services - free telephone / mobile services to the employees and elective relatives of such employees - the eligible employees were treated as regular post - paid customers - Service provided by the appellant was mobile phone connection/fixed line and Broad Band services and fixed wireless phone as well as Black Berry services or push mail service. - "Telecom service" received free of cost by the employees, family member of such employees as well as employees of associate companies did not make any contribution to the business of the appellant company – Held that:- The policy was designed by appellant to circumvent the law granting personal benefit to them at the cost of Revenue - No nexus with evidence was established by appellant that its case falls under free calls provided were exclusively meant for providing any taxable out put service - the language of the policy does not grant immunity to the appellant when substance of the matter is looked into – there was a planned evasion made by the Appellant in the name of "employees' phone policy" and assessable value of free calls escaped taxation. Merely creating a fiction of no consideration received by the appellant in respect of the aforesaid nature of free service provided by it, the appellant appears to have been immensely benefited by reduction of monetary package of remuneration to its eligible, employees, their relatives and employees of Bharti Group of companies. Such undisclosed benefit of appellant was at the cost of Revenue. The appellant failed in the course of hearing to satisfy that value of service were disclosed perquisite to its employees in its account and disclosed to Income tax Authority. The circular on which appellant was relying was withdrawn – and the withdrawn circular cannot over ride the law relating to taxation of taxable service provided - the appellant misconceived the circular for a misplaced sympathy. Plea time barred - extended period of limitation – Held that:- Time bar plea of appellant was baseless - the appellant deliberately suppressed material facts without providing details to the department nor it was registered - Show cause notice were issued to the appellant consequent upon audit finding relating to the period - going to the facts of the case the notice is not time barred – thus the appellant cannot escape from taxation. The appellant is a very big concern and its accounts are computerized by well-built software - it cannot plead its innocence after deliberately delaying to furnish information to the department - Motive of evasion of appellant was well established. Revenue neutrality - Held that:- When the appellant pleaded that there should be Revenue neutrality that was also discarded by the learned Adjudicating Authority in Para 41(ii) of the order bringing out that there was no integral connection between the calls allowed free by the appellant and the taxable output service that produced. Therefore appellant's failure to furnish relevant facts and figures denying liability proved suppression. Separate proceedings to be initiated in relation to the services provided by the appellant in different states. Stay application – two third amount of service tax was ordered to be submitted – stay granted partly.
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