Service tax penalty sustained for prolonged non-payment and delayed registration showing intent to evade tax.

Prolonged non-payment of service tax, coupled with late registration and delayed compliance, supported the conclusion that the default was not merely inadvertent but reflected intent to evade tax. The assessee had remained unregistered for nearly two years while supplying manpower services, registered only after a departmental visit, and cleared dues after substantial delay extending up to 36 months. Although invoices and the purchase order separately indicated service tax and the recipient later took credit, those facts did not excuse the sustained failure to discharge liability in time. On those facts, the penalties were sustained and the appeal was rejected.

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Issues: Whether the penalties imposed for delayed payment of service tax were sustainable in the facts showing prolonged non-payment, late registration, and circumstances indicating an intention to evade tax.

Analysis: The appellant had remained unregistered for nearly two years while providing manpower supply services and had paid the dues only after substantial delay. The invoices and purchase order showed that service tax was separately indicated and that the recipient took credit later, yet the appellant still failed to discharge tax liabilities within a reasonable time. Registration was obtained only after departmental visit, and the pattern of delay extended up to 36 months. These facts supported the inference that the default was not merely inadvertent but reflected an intent to evade service tax.

Conclusion: The penalties were upheld and the appeal was rejected.

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