2015 (11) TMI 478 - AT - Service Tax

Appellant's Penalties Upheld for Tax Non-Compliance and Misstatement

M/s CMS Computers Ltd. Versus Commissioner of Service Tax, Mumbai

M/s CMS Computers Ltd. Versus Commissioner of Service Tax, Mumbai - TMI Issues:Service tax liability on various services, contesting penalties imposed by adjudicating authority.Analysis:The appeal was directed against Order-in-Original No. 44/STC/BR/10-11 dated 25.02.2011, concerning service tax liabilities on multiple services. The appellant, a registered service provider, faced a show cause notice for not discharging service tax obligations on services like Manpower Supply, Business Support Service, Renting of Immovable Property Service, among others. The adjudicating authority confirmed the demand, interest, and penalties under section 78 of the Finance Act 1994, which the appellant contested on both merit and limitation grounds.The appellant's counsel argued that the tax liabilities were already paid, and the demands were improper. For instance, in the case of Manpower Supply, the appellant claimed it was a reimbursement of actual costs, not a commercial concern. Similarly, for Business Support Service, they argued about printing bills at customer premises. The counsel also disputed the tax liability on commercial coaching classes, stating fees collected were not taxable. The appellant sought leniency, citing payment of tax liabilities and invoking section 80 due to a genuine belief of non-taxability.The departmental representative contended that detailed investigations revealed the tax liabilities that would have otherwise escaped. They emphasized that the appellant, being a registered unit, should have sought clarification from authorities if in doubt about tax obligations.After considering arguments from both sides and examining the records, the Tribunal noted that the appellant did not contest the tax liability and interest but challenged the penalties. It was found that the appellant had mis-declared taxable receipts, indicating a motive to suppress and mis-declare transactions. Despite arguments that services were not taxable, the Tribunal held that the services were taxable, and the appellant's actions amounted to suppression and misstatement of tax liability. Consequently, the Tribunal upheld the penalties imposed under Section 78, concluding that the impugned order was correct and did not warrant interference.In conclusion, the appeal was disposed of by affirming the tax liability, interest, and penalties imposed on the appellant, emphasizing the importance of compliance with tax laws and rejecting the appellant's arguments against penalties.