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of <h1>Tribunal upholds service tax demands, remands for recomputation, penalties imposed, late fees set aside.</h1> <h3>Adiraj Manpower Services Pvt. Ltd. Versus Commissioner of Cen. Excise, Pune-II</h3> Adiraj Manpower Services Pvt. Ltd. Versus Commissioner of Cen. Excise, Pune-II - TMI Issues Involved:1. Demand of Service Tax and Education Cess for delayed payment.2. Demand of Service Tax and Education Cess for short payment or non-payment.3. Recovery of interest on confirmed demands.4. Imposition of penalties for failure to pay service tax within due dates.5. Imposition of penalties for incorrect details in service tax returns and late filing of returns.6. Imposition of penalties for tax delinquency.7. Applicability of exemption under Notification No 25/2012-ST for job work activities.8. Inclusion of canteen charges in taxable value.9. Invocation of extended period of limitation.10. Simultaneous imposition of penalties under Sections 76 and 78.Detailed Analysis:1. Demand of Service Tax and Education Cess for Delayed Payment:The Commissioner confirmed the demand of Service Tax and Education Cess amounting to Rs. 10,81,74,382/- for the delayed payment by the assessee, appropriating the amount already paid by the assessee. The tribunal upheld this demand and appropriation, noting that the appellant admitted their liability and deposited the tax along with interest.2. Demand of Service Tax and Education Cess for Short Payment or Non-Payment:The Commissioner confirmed the demand of Service Tax and Education Cess amounting to Rs. 39,33,395/- for short payment or non-payment in respect of services provided to M/s Sigma. The tribunal upheld this demand but remanded the matter for recomputing the demand after reducing the taxable value by the canteen charges recovered from employees.3. Recovery of Interest on Confirmed Demands:The Commissioner ordered the recovery of interest on the confirmed demands under Section 75. The tribunal upheld the recovery of interest, citing the Bombay High Court decision in Padmashree V V Patil SSK, which held that interest is chargeable even if the short duty is deposited before the issuance of a show cause notice.4. Imposition of Penalties for Failure to Pay Service Tax Within Due Dates:The Commissioner imposed a penalty under Section 76 for failure to pay service tax within due dates. The tribunal upheld this penalty, referencing the Supreme Court decision in Gujarat Travancore Agency Cochin, which stated that penalty for tax delinquency is a civil obligation and does not require proof of mens rea.5. Imposition of Penalties for Incorrect Details in Service Tax Returns and Late Filing of Returns:The Commissioner imposed penalties under Section 77(2) for incorrect details in service tax returns and late filing of returns. The tribunal set aside these penalties, noting that the appellants had filed their ST-3 returns within the extended due dates notified by the CBEC.6. Imposition of Penalties for Tax Delinquency:The Commissioner imposed a penalty under Section 78 for tax delinquency. The tribunal set aside this penalty, citing the proviso to Section 78, which states that penalties under Sections 76 and 78 should not be imposed simultaneously.7. Applicability of Exemption under Notification No 25/2012-ST for Job Work Activities:The appellants claimed that their services to M/s Sigma were exempt under Notification No 25/2012-ST as job work. The tribunal rejected this claim, determining that the agreement between the appellants and M/s Sigma was for contract labour and not job work, thus not qualifying for the exemption.8. Inclusion of Canteen Charges in Taxable Value:The Commissioner included canteen charges recovered from employees in the taxable value. The tribunal disagreed, holding that canteen charges recovered from employees should not be added to the taxable value for service tax purposes.9. Invocation of Extended Period of Limitation:The Commissioner invoked the extended period of limitation under the proviso to Section 73(1) due to suppression of facts by the appellants. The tribunal upheld this invocation, noting that the appellants did not inform the department about the non-payment of service tax for services provided to M/s Sigma.10. Simultaneous Imposition of Penalties under Sections 76 and 78:The tribunal set aside the penalties imposed under Section 78, as penalties under Sections 76 and 78 cannot be imposed simultaneously according to the proviso to Section 78.Conclusion:The tribunal upheld the demands of service tax and interest, remanded the matter for recomputing the demand after excluding canteen charges, upheld penalties under Section 76, and set aside penalties under Sections 77(2) and 78 and late fees under Section 70(1).
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