TMI Blog2008 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner vide Order-in-Original No. 35/AC-I/ADJ/ST/SA/05 dated 20-4-2005 in the case of M/s. Magnum Environment Managements Pvt. Ltd. has ordered as under:- (i) The amount of service tax for the period 16-10-1998 to March, 2002 is assessed as Rs. 3,87,672/- under Section 73 of Finance Act, 1994 on gross amount of Rs. 77,53,441/- collected by the party M/s. Magnum Security Pvt. Ltd. However, as the party has already paid an amount of Rs. 48,184/- as service tax, the same is adjusted and an amount of Rs. 3,39,488/- is determined as service tax short paid by the party on the escaped value of taxable services, which is recoverable from them. (ii) Interest at the appropriate rate is also recoverable under Section 75 of Finance Act, 1994 for the period of default. (iii) A penalty of Rs. 1,66,600/- is imposed under Section 76 of Finance Act, 1994. (iv) A penalty of Rs. 3,39,488/- is imposed under Section 78 of Finance Act, 1994. (v) A penalty of Rs. 33,949/- is imposed upon them under Section 79 of Finance Act, 1994. Similarly, the Assistant Commissioner vide Order-in-Original No. 36/AC-I/ADJ/ST/SA/05 dated 20-4-2005 in the case of M/s. Magnum International has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wages Act, EPF ESIC contributions. They paid service tax on the percentage service charges received by them. 8. The appellants stated that they honestly believed that it is their service of providing personnel to clients which was liable to Service Tax and accordingly they paid Tax on Service/Supervision Charges computed as percentage of-reimbursement of actual of statutory Minimum Wages, EPF ESIC contribution etc. According to them, the same was truly and honestly disclosed to the Department. They stated that the bills showing the gross amount and their percentage service Charges and Service Tax computation on such charges were furnished to the Superintendent (T) / Service Tax for the month of March, 99 in February and March 2000, for April 2000 vide their letter delivered on 13-5-2000 and 21-6-2000 and to Deputy Commissioner (along with the bills of August 2000) on 22-9-2000. Thus all the primary material facts stood furnished as required under Section 73 of the Finance Act, 1994. They also stated that in regard to M/s. Magnum Security Services also the gross payments received stood furnished to the Department on 13-10-2000, 30-10-2000 from M/s. Satyam, ACC and Sharma En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would not constitute suppression of fact with an intent to evade payment of Service Tax. Hence, they argued that the extended period of limitation would not be invocable nor penalties imposable legally. They prayed for setting aside the impugned orders passed by the Commissioner (Appeals). 12. The learned DR reiterated the contents of the orders passed by the Commissioner (Appeals) and the Assistant Commissioner and prayed for upholding these orders. 13. We have examined the position. We find that the Half Yearly returns from October, 98 onwards were filed for the first time on 1-2-2000. When returns themselves for the first time were filed in February, 2000 and the Department became aware of the service tax being paid by the appellants, the Department could only thereafter proceed further to call for information under Section 71(2) for finalization of assessments. A reading of these returns would reveal that in the returns, under the heading, "Value of Taxable Services Charged or Billed", certain amounts have been shown. Similar amounts have been shown under the heading, "Value of Taxable Services Realized". What these amounts really are could only be verified if the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng at the returns no one can state whether the appellants were paying tax on the gross amounts or supervision charges. The appellant's contention that the Supdt. could have easily completed assessments as the supervision charges they were collecting were 10% of the total amounts and all that was required to do was to multiply this amount by 10 so as to workout the gross amount received, is devoid of any substance. Tax cannot be assessed on assumptions and presumptions. By appellants' own admission, their supervision/service charges were varying from 5% to 15%. If that be so, it would not have been correct on the part of the Supdt. to multiply the supervision/service charges by flat 10 to work out the gross amounts in the absence of full details. To verify the correctness of the tax assessed by the appellants, they are required to produce any accounts, documents or other evidence as the Supdt. deems necessary for such verification. In the facts of the present case, we find that the appellants have failed to disclose wholly or truly all material facts required for verification of the assessment under Section 71 of the Act with the result the value of taxable service has escaped asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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