2015 (6) TMI 546 - AT - Service Tax

Tribunal upholds service tax demand & penalties for Event Management sector appellant.

Midas Events Versus Commissioner of Service Tax, Mumbai

The Tribunal upheld the Order-in-Original confirming a demand for service tax from October 2002 to March 2007 against an appellant in the Event Management ... Demand of service tax - cum duty value - Event Management service - Invocation of extended period of limitation - Held that:- appellant at no stage made available any documents such as invoices and contracts with their clients which would indicate that value received by them is cum duty value. We notice that one of the clients is a well-known company i.e. Hindustan Unilever. We find no reason why any documents could not have been obtained from their client to show that the value received by them is actually cum duty value. Appellant got enough opportunity to produce documents from their client even if their own documents were washed away in floods. The case of Roopa Ram Suthar (2014 (12) TMI 826 - CESTAT NEW DELHI) does not come to the aid of the client because in that case documents existed and invoices clearly disclosed that no service tax component was added and collected from customer. Appellant was very well aware of their responsibility and liability, having taken service tax registration in Feb 2003. But appellant still chose to avoid all Legal obligations cast on them after taken service tax registration and not complying with the requirement of filing ST3 returns on periodical basis for a long period of six years till the time of issuance of show cause notice - appellant had service tax registration but did not receive the show cause notice, did not submit any reply to the show cause notice, did not even appear for personal hearings on various dates can only lead to the conclusion that their intentions were not bonafide. - Decided against assessee. Issues:- Demand of service tax for the period from October 2002 to March 2007- Failure to pay service tax liability and submit necessary documents- Dispute over the consideration of gross value as cum duty value- Non-cooperative attitude of the appellant- Imposition of penalties under Section 76, 77, 78 of the Finance Act, 1994- Waiver of penalty and time bar considerationsAnalysis:The judgment pertains to an appeal arising from an Order-in-Original confirming a demand of service tax for a specific period. The appellant, engaged in Event Management, failed to pay service tax liability and did not submit essential documents like contracts and invoices. The appellant argued that the gross value received should be considered as cum duty value, citing a precedent, but failed to provide supporting documents. The Revenue highlighted the appellant's non-cooperative behavior and emphasized the correctness of the duty demanded. The Tribunal rejected the appellant's contention, noting the lack of evidence to support the cum duty value claim, especially considering the appellant's failure to produce relevant documents despite having the opportunity to do so.Regarding the time bar and penalty imposition, the Tribunal observed that the appellant displayed a callous attitude by not fulfilling their legal obligations despite being aware of their responsibilities since obtaining service tax registration. The appellant's failure to comply with filing ST3 returns for six years and their non-responsive behavior during the investigation led to the conclusion that their intentions were not bona fide. Citing previous judgments, the Tribunal held that there was no reasonable cause shown by the appellant to warrant the waiver of penalties under Section 80 of the Finance Act. Consequently, the appeal was rejected based on the appellant's lack of cooperation and failure to demonstrate a valid reason for their non-compliance with service tax regulations.