2013 (7) TMI 663 - AT - Service Tax

Service tax demand upheld against security services provider for failure to remit taxes.

TOPS SECURITY LTD Versus COMMISSIONER OF CENTRAL EXCISE, AND SERVICE TAX

The Tribunal upheld the confirmation of a service tax demand of Rs. 1,52,08,411 against a security services provider for failure to remit collected taxes. ... Plea for leniency – assessee provided security services but did not paid service tax – after adjudication pleaded for leniency - Held that:- It is not a case where any leniency is merited or required to be shown - the same will send a wrong signal to the tax-paying community – court direct the assessee to remit the balance amount of service tax along with interest -the assessee had collected the service tax from their customers and have failed to remit the same - appellant is a repeated offender and the Tribunal had confirmed pre-deposit of huge amounts which the assessee had collected from their customers. Stay application – after submission of duty penalty to be waived and stay granted – decided against the assessee. Issues:Service tax demand confirmation, interest imposition, penalties, appellant's liability, leniency plea, repeated offender status, pre-deposit of penalty, compliance deadline, waiver of penalty recovery during appeal.Service tax demand confirmation:The appeal was filed against an Order-in-Original confirming a service tax demand of Rs. 1,52,08,411 against the appellant, a security services provider. The appellant had collected service tax from customers but failed to remit it to the exchequer.Interest imposition and penalties:In addition to confirming the service tax demand, interest on the demand was also confirmed, along with penalties. An amount of Rs. 25,92,035 already paid by the appellant was appropriated towards the demand.Appellant's liability and leniency plea:The appellant did not dispute the service tax liability or the fact that they collected service tax from customers. However, the appellant sought leniency despite being a repeated offender.Repeated offender status and strict terms:The Revenue argued that the appellant, being a repeated offender, did not deserve leniency and should be put under strict terms. The Tribunal noted that the appellant had been involved in multiple cases with confirmed pre-deposits of significant amounts collected from customers.Decision and compliance deadline:After considering submissions and records, the Tribunal found no merit in showing leniency to the appellant, as it would send a wrong signal to the tax-paying community. The appellant was directed to remit the balance amount of service tax with interest within two weeks and report compliance by a specified date. Upon compliance, the pre-deposit of the penalty would be waived, and recovery stayed during the appeal process.