2019 (5) TMI 1492 - AT - Service Tax

Security Agency Service Provider's Tax Appeal Dismissed for Failure to Maintain Records

The Tribunal upheld the decision of the Commissioner (Appeals) in a case involving a security agency service provider facing a demand for service tax ... Short payment of service tax - contention made by the appellant that short payment of Service Tax has been calculated on the invoice value of the services provided by them to their service recipient, though the entire amount of invoice has not been realized by them has not been substantiated by the appellant - HELD THAT:- The contention made by the appellant are not legally sustainable as no evidence has been adduced before us in support of these claims. It is also a matter of record that the required service tax return ST 3 has not been filed in time and thereby violating the provisions of section 70 of the Finance Act, 1994 read with Rule 7 of Service Tax Rules. Appeal is without any merits and is dismissed. Issues:Demand of service tax based on gross amount from invoices without actual receipts, benefit of Notification No. 30/2012, non-maintenance of proper records, non-filing of ST-3 returns, imposition of interest and penalty.Analysis:The appellant, registered for 'Security Agency Service,' faced a demand for service tax based on gross invoice amounts collected from service recipients. The appellant argued that the tax should be calculated on actual receipts, amounting to Rs. 11,55,596, already paid. They claimed lack of grounds for interest and penalty. The Department collected information from service recipients due to the appellant's record-keeping failure and non-filing of ST-3 returns. The adjudicating authority applied Notification No. 30/2012, confirming Rs. 27,50,795 tax liability, interest under section 75, and penalties under sections 77 and 78. The Commissioner (Appeals) rejected the appeal.The Tribunal noted the appellant's failure to maintain proper records or file ST-3 returns for 2008-2013. The Department issued a Show Cause Notice based on details from service recipients like M/s. Bharat Heavy Electricals Ltd., M/s. GAIL India Ltd., etc. The appellant's argument that tax should be based on actual receipts, not invoice amounts, lacked evidence. The Tribunal found the appellant's contentions legally unsustainable, citing non-compliance with tax return filing requirements.In conclusion, the Tribunal dismissed the appeal, upholding the impugned order-in-appeal. The appellant's claims lacked merit, with no legal basis found to interfere with the decision. The appeal was deemed without merit and subsequently dismissed on 23/05/2019.