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TMI Blog2024 (7) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... espective years, the department noted that the gross receipts indicated by the appellant in their ST-3 returns were substantially lower that the amounts shown in 26AS statement. During the investigations, the appellant deposited an amount of Rs. 45,00,000/-. The department issued the show cause notice dated 20.02.2017 alleging that the appellant had not paid the due amount of service tax on manpower recruitment and supply service, and it was also alleged that the appellant had collected the service tax amount from their clients and did not deposit the same in the Government exchequer. The Commissioner, vide the impugned order confirmed demand of Rs. 2,21,40,531/-, interest as per section 75 of the Finance Act, 1994 along with penalty of Rs 10,000/- and Rs. 89,400/- under Section 77 of the Finance Act, 1994 and also imposed penalty of Rs. 2.21,40,531/-under Section 78 of the Finance Act, 1994. Being aggrieved of the aforesaid order-in-Original, the appellant is preferring this appeal. 3. The Learned Counsel to the appellant submitted that the SCN alleges suppression of facts whereas none of the other ingredients of proviso to section 73(1) viz., fraud, collusion, wilful misstatemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2. The ld counsel further contended that the normal period of limitation under Section 73 of the Finance Act, 1994 was 18 months up to 13.05.2016, which was changed to 30 months w.e.f. 14.05.2016. Hon'ble Apex Court, in the case of UOI v. Uttam Steels Ltd. 2015 (319) ELT 598 (S.C.) has held that where the right of suit is barred under the law of limitation in force before the new provision came into operation and a vested right has accrued to another, the new provision cannot revive the barred right or take away the accrued right. Therefore, demand for any period that had become time-barred as on 13.05.2016 under the old provision of 18 months, could not be revived by the new provision of 30 months which came into effect on 14.05.2016. He further submitted that out of the demand confirmed in the order, the demand up to Sept., 2014 is time barred. The only demand that survives is for the period 01.10.2014 to 31.03.2015, against which the appellant had deposited Service tax amounting to Rs. 45,00,000/-. There being no suppression of facts and there being no finding of 'misstatement of facts', in the order-in-original, penalty under Section 78 was also not imposable. He also state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f taxable services realized as calculated from 26AS statement and as shown in the Balance Sheet. He submitted that the appellant had failed to co-operate with the department during the course of investigation and failed to respond to the communications and summons issued by the department from time to time and the department was forced to collect the proof of evasion of service tax by the party from third party sources such as Income Tax Department. He further contended that the appellant had failed to respond to show cause notice and nor did the appellant appear for personal hearings granted to them, which also proves beyond doubt that the appellant has nothing to say their defence and they are in admittance of the charges levelled against them in the impugned show cause notice. The aforesaid non-co-operative attitude of appellant clearly shows their utter disrespect to the law of the land and their evasive nature. 4.1 The ld. AR further contended that during the period in question though the appellant was charging and collecting service tax from their clients but deliberately, intentionally and with a malafide intent failed to deposit the same to the government exchequer. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from July 1, 2012, Section 65(68) and Section 65(105)(k) were rescinded and new definition of supply of Manpower inserted under Rule 2(1) (g) of the Service Tax Rules, 1994 ("the STR"), which is reproduced here in below: "Supply of Manpower means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control." 5.2 As per the legal provisions prior to 1.7.2012, we note that the liability to pay the entire service tax was on the service provider. However, vide notification No. 30/2012 dated 20.06.2012, the service tax liability was shared (25%/75%) in case if any individual or HUF or partnership firm is providing supply of manpower service for any purpose to business entity registered as a body corporate. The adjudicating authority has held that the Form 26 AS/Balance Sheets of the appellant, as obtained from the Income Tax department indicate that during the period 2011-12 to 2014-2015, the appellant was engaged in providing the said taxable services. We find that there is no contrary evidence that has been submitted before us by the appellant to hold otherwise. We also note that there is a vast difference in the taxable value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re him, which cannot be faulted. Suppression of material facts is a serious matter which have severe consequences. It is on record that the appellant did not respond to summons, letters and failed to file any written submissions not did they appear for personal hearing. Thus, there was no effort by the appellant to clarify or submit any documentary evidence to contradict the allegation of the department. We note that the Department has relied on the 26AS statement which gives a consolidated record of every tax-related information associated with a PAN. Therefore, the veracity of the 26AS statement cannot be doubted. This statement clearly establishes that the appellant was actively providing the said service during the relevant period, as is evident as tax on his income has been collected/deducted at source by his service recipient. This was not declared in the ST-3 returns by the appellant. It has been argued before us that the appellant calculated his service tax liability and paid Rs 45 lakh and has stated that he continued to pay tax on a regular basis. This clearly establishes that the appellant was aware of his tax liability and chose not to pay his tax correctly. In this con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed in the Rules. In the instant case, we note that the appellant did not cooperate with the investigations, failed to submit any documents to substantiate his claim and did not disclose the actual value of taxable services provided by him in the ST-3 returns filed by him. This clearly establishes his intent to evade his liability to pay service tax. Thereafter to appeal to this forum alleging that the demand was time barred, and the finding of suppression of facts was erroneous cannot be accepted. Learned Counsel relied on the Hon'ble Delhi High Court's decision in the case of M/s Hotchand Jawaharmall vs UOI & Others [1983(14) ELT 2197(Del)] to emphasise his point. We find that the Hon'ble High Court has held that as follows: "5. ...........This is clear admission on the part of petitioner that they had knowledge that the goods were being supplied by a party in Japan. This fact is stated in the invoice of the Easter Traders. Therefore, the knowledge of the Japanese party can be directly imputed to Eastern Traders. It can be fairly inferred that the petitioner had the knowledge of the transaction between various parties in question and had also the knowledge of the price of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, as well as suppressed the value of the taxable services realized by them in the ST-3 returns filed by them. In this context, we note that the Apex Court in the case of M/s Usha Rectifier Corp. Ltd vs CCE [2011(263) ELT 655 (SC)] held that extended period is invokable for notices where the information has been taken by the Department from the Balance Sheet. There are other decisions of the Hon'ble Apex Court in this regard viz., M/s Box & carton India Pvt Ltd. Vs Commissioner [2010(255) ELT A13 (SC)], M/s Modipon Fibre Company vs CCE [2007 (218) ELT (8)] wherein the Court gave a ruling to the effect that suppression is not about making a false declaration but also about not declaring what should be declared. In view of the said rulings, we have no hesitation in holding that the extended period was rightly upheld by the adjudicating authority.
7. As regards penalty, we uphold the penalties imposed under Section 77(1)(c)(ii), 77(1)(c)(iii) and Section 78 of the Act.
8. In view of the above discussions, we find no infirmity in the impugned order, and uphold the same. Consequently, the appeal stands dismissed.
(Order pronounced in the open Court on 26.07.2024) X X X X Extracts X X X X X X X X Extracts X X X X
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