2019 (7) TMI 958 - AT - Service Tax

Service tax demand upheld for intentional non-compliance, penalties imposed

M/s AK Sharma Versus Commissioner of Central Excise & Service Tax, Raipur

M/s AK Sharma Versus Commissioner of Central Excise & Service Tax, Raipur - TMI Issues:- Confirmation of demand for service tax along with penalties and interests for the period 2008-09 to 2011-12.- Applicability of extended period of limitation.- Imposition of penalties under various sections of the Act.- Claim for waiver of penalty under Section 80 of the Act.- Interpretation of balance sheet for quantification of service tax.- Non-payment of service tax by the appellant.Confirmation of Demand for Service Tax:The appellant, engaged in providing taxable services, failed to pay appropriate service tax despite collecting it from clients. Investigations revealed non-payment of service tax to the government exchequer, leading to a demand of &8377; 64,25,449/- confirmed against the appellant for the period 2008-09 to 2011-12. The appellant admitted liability during investigations, acknowledging non-payment and lack of proper documentation. The appellant made partial payments during proceedings, but the adjudicating authority confirmed the demand.Applicability of Extended Period of Limitation:The appellant contested the invocation of the extended period of limitation, arguing a bona fide belief regarding non-liability to pay service tax on certain amounts. However, the adjudicating authority upheld the extended period, citing deliberate suppression of facts by the appellant. The show cause notice issued more than four years after the relevant period was deemed valid due to the appellant's failure to pay service tax despite collection.Imposition of Penalties:Penalties under various sections of the Act were imposed by the adjudicating authority, which the appellant challenged. The appellant argued against penalties under Sections 76, 77, 78, and Rule 15 of Cenvat Credit Rules, claiming no deliberate defiance of law. The appellant also sought waiver under Section 80 of the Act, but the authority upheld the penalties, finding the appellant's actions intentional.Interpretation of Balance Sheet and Non-Payment of Service Tax:The appellant's defense, based on the interpretation of the balance sheet for quantifying service tax, was refuted. The appellant's reliance on case laws was deemed inapplicable to the situation where service tax was collected but not deposited. The appellant's failure to adhere to tax payment and filing requirements, despite obtaining registration, was noted. The appellant's actions were considered deliberate suppression of facts to evade service tax payment, justifying the penalties imposed.Conclusion:The Tribunal upheld the impugned order, dismissing the appeal. The appellant's failure to pay service tax, despite collection, and the deliberate suppression of facts were key factors in confirming the demand and penalties. The appellant's arguments regarding extended limitation, penalties, and waiver were rejected, emphasizing the intentional non-compliance with tax obligations.---