9911796707
TMI Blog2024 (10) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... to be recoverable from the party. 2. I impose penalty of Rs.5, 000/- u/s 77 of the Act for violation of Section 70 readwith Rule 7 of the Rules. 3. I impose penalty Rs. 16,32,644/- under Section 77 of the Finance Act, 1994. However, penalty imposed under this Section shall stand reduced to 25% of the Service Tax amount if the entire dues including Service Tax, Interest and penalties imposed as above are paid within 30 days from receipt of this order." 2.1 Appellant is registered as service provider mainly to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco Industries Ltd. as service recipient, it was observed that appellant was providing taxable services under the category of Man Power Supply Agency Service to the service recipient. However, they have not discharged the service tax due in respect of these services. 2.3 After completion of investigation and inquiry, a show cause notice dated 13.10.2010 was issued to the appellant asking them to show cause as to why:- "1. The service tax amounting to Rs. Rs. 859,048/- (Service Tax Rs. 8,39,269/- + Education Cess Rs. 16076/- + Secondary & Higher Education Cess Rs. 3703/-) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross turnover 18,17,788.00 Less service prior to 16.06.2005 7,53,033.00 Less service tax paid by M/s Hindalco 3,26,038.64 28,96,889.64 Net taxable turnover 1,22,51,343.36 Add. Services included prior to 16.06.2005 considered as taxable. 987.61 Net taxable turnover 1,22,52,330.97 Service Tax 12,61,990.09 Less service tax already paid as per SCN 13,27,201.00 Less service tax already paid as per annexure 5 2,60,546.00 Net tax payable 9,78,807.09 That the party submitted that he is a petty contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return thereafter on regular basis. That the party is ready to deposit the service tax, due as per the chart for calculation of tax submitted with the reply, along with interest. In view of the submissions party prays for waiver of penalty. At the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culation is correct, but as I have expressed hereinabove, that it is a serious matter that while an amount of Rs. 3,26,068.64 was recovered representing the service tax, only an amount of Rs. 22,637/- was paid/deposited as Service Tax and Rs. 2,60,546/- was paid through challans to the Government retaining an amount ol' Rs. 42.885.64 illegally and unjustly which in any case was liable to be deposited to the Exchequer irrespective of the Service Tax liability as per provisions of Section 73A of the Finance Act,1994. Before discussions on admissibility of deductions, I note that this action of the party of retention of amount collected as Service Tax is violation of not only section 66 and 70 of the Finance Act, 1994. (as the party had consciously assessed and collected a service tax of Rs. 3,26,068.64 but deposited only Rs. 22,637/- and Rs. 2,60,546/-) but also of the provisions of Section 73A of the Finance Act. 1994 As regards the admissibility of deductions, I find that the calculations have been verified by the divisions and since they have verified the fact that this amount of Rs. 3,26,068.64 is included in the total amount of taxable services indicated in the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the adjudicating authority. 4.6 Thus, the findings or facts rendered by original authority and not challenged before the first Appellate Authority that the amount claimed as Provident Fund is part of the gross amount received as consideration for the provision of the said services cannot be disputed with. That being so, service tax has been rightly demanded and confirmed after allowing the deductions towards the amounts received for the services provided prior to 16.06.2005 and after deducting the amount of service tax included in the gross amount. 4.7 On limitation and penalty, Original Authority has observed as follows:- "Now, I take the issue of invoking the proviso of Section 73 (1) for demand and recovery under the extended period. It is evident from the fact of the case and documents on record that during the relevant period party has not disclosed anything to the department inspite of the fact that they have rendered taxable services and received payment thereof and also the amount of Service Tax and later also obtained service tax registration and charged service tax from the clients. The gross amount received by the party against providing taxable services wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the Service Tax from the Service Recipient but did not deposit the same in clear dis regard to the law. Hon'ble Tribunal in the case of Suhita Ethnic Marketing Services Pvt Ltd. Vs. CCE [2005] 2 STT 222 (Mumbai-CESTAT), Mett MacDonald Ltd. Vs. CCE [1994-2006] STT 239 (New Delhi-CEGAT) and ACME Tele Power Pvt. Ltd. Vs. CCE, Chandigarh AIT-2008-13 (CESTAT) it has been held that when the amount of service tax has been determined by the department during the course of investigation then the levy of penalty is justified. In view of the facts and circumstances of the case the proposal for imposition under Section 78 of the Finance Act, 1994 is justified and therefore, I hold the penalty. I also observe that the party has not deposited the total amount of service tax received from the service recipient which clearly shows the bad intention of the party." 4.8 The above findings cannot be disputed, as the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. They were not filing the ST-3 returns on time in the manner as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability, equal penalty shall be imposed pertaining to the amount arrived in the remand for re-quantification, i.e., whether Rs. 16,29,611/- or Rs. 14,60,620/-. The equal penalty under Section 78 shall be applicable in respect of the this demand. No interference is also made with respect to the penalties imposed under Section 70 and 77 of the Act. In case of Air India Limited [2017 (3) G.S.T.L. 374 (Tri. - Del.)] Delhi bench observed: "12. Next, we consider the ground of limitation raised by AIL. The contention of AIL is that no allegation of suppression can be fastened against them since the activities of AIL were within the knowledge of the department during the relevant period. Specifically the appellant had cited a letter dated 7-3-2006 written to the Joint Director of Service Tax to inform the various heads under which it was raising bills on AASL. Further, it has been contended that AIL had not paid service tax under the bona fide belief that it is not payable since AIL had not received payment from AASL. In the annual report 2003-04, it is mentioned "Non-charging of service tax on certain services". This implies that even where service tax has been collected the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Ed. Cess. * It is submitted that on applying the tax rates as applicable from time to time the actual amount of rebate in demand works out to Rs. 38,301/- as against Rs. 33,259/- as per table given in the O-I-O * No penalty can be imposed on the appellants; the appellants never suppressed any fact with any intention to evade the payment of service tax. Therefore, penalty under section 78 of the Act cannot be imposed. * Section 80 of the Act provides that no penalty shall be imposed on the assessee for any failure referred to in sections 76, 77 or 78 of the Act, if the assessee proves that there was reasonable cause for the said failure. 6.2. The adjudicating authority in the impugned order in original observed and held that - "The party is not contesting that they were engaged in providing the Taxable services as discussed in the show cause notice, They disputed only on the quantification aspect, as they have submitted a different char! regarding value of the taxable liability. It is also observed that the adjudicating authority has recorded in ' CASE FOR THE PARTY' that- "The party submitted defence reply on 13.05.2011, and also appeared for personal he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y them to substantiate their claim. The appellants are required to adduce evidences corroborating their contentions in the appeal. In the case of Steel Authority of India Limited versus Commissioner, Central Excise Raipur [2007 (208) E.L.T. 367 (Tri. Del.) ]- the Hon'ble Tribunal observed "Assessee failed to produce any supporting documentary evidence regarding period duration of use of such C I/Steel rolls before sale/removal of same as waste and scrap - No efforts made by assessee to substantiate their claim ........." [Emphasis supplied J Also, in the case of WHIRLPOOL OF INDIA LTD. Versus UNION OF INDIA [2001 (137) E.L.T. 42 (P&H)] the Hon'ble High Court of Punjab & Haryana at Chandigarh held that- "34. The submission is misconceived. The petitioner has come with a complaint against the action of the authorities. The merits have been examined. It has failed to substantiate its claim. Thus, the relief as prayed for cannot be granted." [Emphasis supplied] In the case of Commissioner of Central Excise, Bangalore v. Brindavan Beveragaes (P) Ltd & Ors. [(2007) 5 SCC 388], the Apex Court held as under " 14, ... As no sufficient material much less any material ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
