See clause 93(K) of Finance Bill, 2013

Section 90 is being introduced to specify and differentiate cognizable offences from non-cognizable and bailable offences;

Accordingly the following offence shall be cognizable:

The offence

(d) collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, shall be punishable

The punishment (as per the proposed amendment – See clause 93(J))

(ii) in the case of the offence specified in clause (d), where the amount exceeds fifty lakh rupees, with imprisonment for a term which may extend to seven years:

Non-cognizable and bailable offence:

All other offences mentioned in Section 89 shall be Non-cognizable and bailable.

Cognizable offence: failing to remit collected service tax within the statutory period is treated as cognizable with custodial penalties. Section 90 (clause 93(K), Finance Bill, 2013) classifies as cognizable the offence of collecting service tax and failing to pay it to the Central Government beyond six months from when payment becomes due; delayed remittance exceeding fifty lakh rupees attracts imprisonment up to seven years. All other offences under Section 89 are non-cognizable and bailable.