TMI Blog2019 (1) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... or suppression of the facts with an intention to evade payment of service tax as he was regularly paying the required amount of the service tax to his authorized representative. This indicates that there was no intention on the part of the appellant to evade payment of service tax - it was not appropriate to impose penalty under Sections 76 and 78 on the appellant - penalty not imposable - demand of service tax with interest upheld - appeal allowed in part. - Service Tax Appeal No. 53078 of 2015 - FINAL ORDER No. 50057/2019 - Dated:- 16-1-2019 - Shri Justice Dilip Gupta, President And Shri C L Mahar, Member (Technical) Shri A K Batra, CA and Ms. Swati Garg, Advocate for the Appellants Shri R K Majhi, AR for the Respondent ORDER Per: C L Mahar: The appellant is a proprietary concern registered with the Service Tax department for providing taxable category of Security Agency Services as defined under Section 65(94) of Finance Act, 1994. The department, working on an intelligence, initiated investigations against the appellant for evasion of Service Tax on the services provided by them to various Government Undertakings such as Steel Authority of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident Fund, Employees State Insurance, Labour License, Service Tax etc. 12) That the second party shall receive remuneration from the First party which would equal to the remainder of Service Charges after meeting the obligations/ fulfilling the conditions as laid out is para 4, 5, 9, 10 and 11. 3. The learned Counsel has also submitted that it was Shri Abhishek Kumar who was collecting payments from various customers and making payment to the staff regarding their salary etc. He was also depositing the required taxes etc. The learned Counsel has submitted an affidavit of the appellant to this effect. It has further been contended that as soon as they came to know that Shri Abhishek Kumar had not deposited the due service tax with the Service Tax Department, the appellant immediately made good all the short paid amount of service tax on the services provided by the appellant to various organization. The details of payments made by the appellant after initiation of investigation with the department are as follows: Paid under ST-3 Returns As admitted in the SCN and appropriated in impugned order 40,01,790/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to do a certain act, which is similar for both the sections. 5. Coming to imposition of penalty under section 78 of Finance Act, it has been argued that as soon as the appellant came to know about non-payment of service tax by his authorised person namely, Shri Abhishek Kumar, he deposited an amount of ₹ 44,28,797/- and the balance amount was also deposited by him by May, 2015 along with interest. It has, therefore, been submitted that in view of the provisions of section 78 and 73 of the Act provides that if an assessee before issue of Show cause notice on his own volition deposits the service tax and interest thereon, no penalty would be leviable, penalty under section 78 should not have been imposed on the appellant since the appellant deposited major amount of Service tax which was short paid before issue of Show Cause Notice. 6. It has also been contended that though the appellant may have been a proprietary firm, but the responsibility of making due compliance of statutory provisions as per the agreement was that of Shri Abhishek Kumar and the appellant had been providing Shri Abhishek Kumar the required amount of Service Tax to be paid to the Department. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant came to know about service tax not being paid by his authorized person Shri Abhishek Kumar only after initiation of the investigation. It is also an admitted fact that as soon as the appellant came to know about non-filing of service tax returns as well as non-deposit of service tax by the authorized person Shri Abhishek Kumar, the appellant deposited an amount of ₹ 44,28,835/- before the issue of the show cause notice and the balance amount of about ₹ 28,55,083/- was deposited subsequently after issue of the show cause notice as well as after the matter was adjudicated by the Adjudicating Authority. The appellant thereafter also filed ST-3 returns covering the period from April 2007 to March 2012 alongwith penalty for late filing. 11. The learned Counsel for the appellant since the very beginning had submitted that it was not contesting the determination of service tax under Section 73 (1) of the Finance Act, 1994 and same stands deposited with the Revenue Authorities but the provisions of Section 80 of the Finance Act, 1994 was applicable as the circumstances under which the evasion of service tax took place was beyond the control of the appellant. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of business for the principals. In the case in hand it is on record that the appellant had appointed an agent to discharge the appropriate service tax liability and had not appointed him for making any misrepresentation or to commit fraud that also for the Consultant s own benefit. In view of the above, the question of vicarious liability on the part of the appellant does not arise. 6.4 As regards the decision relied upon by the learned DR in the case of Indsur Global Ltd. (supra), we find that in that case the Hon ble High Court of Gujarat was considering the appeal of the assessee therein in which the appellant could not have had reasonable cause for the failure of discharge of service tax liability, what would constitute reasonable failure in a given case was held as essentially be a question of fact. In the case in hand the reasonable cause could be that in favour of the appellant as he had every reason to believe the Consultant that he has discharged the service tax liability as per the records . (emphasis supplied) 13. The judgment of the Madras High Court in the case of CST, Chennai vs. Lawson Travel Tours (I) Pvt. Ltd. 2015 (38) S.T.R. 227 (Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
