TaxTMI 
TaxTMI 
2009 (9) TMI 743
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....Jaysingpur for carrying out the work of shot blasting in the factory during the period from 16-6-2005 to 31-1-2007, but failed to pay the Service tax amounting to Rs. 7,81,650/- including education cess; that basing on the above facts, a SCN dated 10-10-2007 was issued to the appellant directing them to show cause as to why the Service tax amount of Rs. 7,81,650/- including education cess should not be demanded under Section 73(1)(2) of the Finance Act, 1994 (hereinafter referred as the Act) interest under Section 75 of the Act should not be recovered and penalty under Sections 76, 77 and 78 of the Act should not be imposed; that on adjudication, the demand raised in the SCN was confirmed along with interest, besides imposing penalty of Rs.....
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....nce there cannot be any suppression; (v) that mere stating that there is a suppression, penalty cannot be imposed unless the suppression is proved by giving reasons on record, otherwise it will be harsh action against a ignorant tax payer; (vi) that in the instant case, the intention of evading duty is totally absent as the appellant was under confusion whether be requires to pay tax or not, as his relations with M/s. Supercraft Foundry and M/s. Swift Engineering Enterprises Pvt. Ltd. are on principle to principle; basis and not as employer and employee; (vii) that it was a confusing situation as to whether the appellant was coming under the network of the Service tax under the category of 'manpower recruitment or supply agency' se....
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....e following issues fall for my consideration. (i) Whether the activities of 'supply of manpower' to M/s. Supercraft Foundry and M/s. Swift Engineering Enterprises Pvt. Ltd. would fall under the category of 'manpower recruitment or supply agency' service with effect from 16-6-2005; (ii) Whether there is any intention on the part of the appellant in not taking registration and paying Service tax and accordingly, contravened Section 78 of the Act. 4.1 Let me take the first issue. The first contention of the appellant that the lower authority has not dealt with the contents of their final reply properly with regard to the contention in respect of applicability of term 'manpower recruitment or supply agency' service is not acceptable in....
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.... is a proprietary concern engaged in providing services on commercial basis and also there is no dispute that he is supplying manpower to his clients. Under the above circumstances, the conclusion of the lower authority that the activities of the appellant i.e. providing manpower to his above mentioned two clients are falling under the category of 'supply of manpower' is in order. 5. The next issue to be considered is that whether the intention (mens-rea) could be attributed on the part of the appellant is not taking registration and paying Service tax during the period under dispute. The record reveals that the Department, on the basis of scrutiny of the records of M/s. Supercraft Foundry, has come across that the appellant was providin....
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....ervice would fall under the category of 'manpower recruitment or supply agency' service; that further it has come on record that the appellant is semiliterate and accordingly does not have any benefits of evading the provisions of the Service Tax Law; that it is also not the case of the Department that the appellant has collected the tax from his clients and failed to pay the same to the Government; that under the above circumstances, the appellant has not acted deliberately for avoiding the Service tax. The Apex Court in the case of Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) has held that "Extended period of five years is inapplicable for mere failure or negligence of the manufacturer to take out license or pay duty when there w....