2015 (10) TMI 1732

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....registered with the authorities under service tax for the services rendered under Manpower Recruitment or Supply Agency Services. It was noticed by the lower authorities that during the period June 2005 to March 2010, there was an evasion of service tax to the tune of Rs. 1.13 crore due to fabrication/alteration of TR-6/GAR-7 challans and bogus challans. After an investigation show-cause notice was issued to the appellant for demand of tax liability and also for demand of interest and imposition of penalty. Adjudicating authority after following due process of law, confirmed the tax liability with interest and imposed equivalent amount of penalty under Section 78 of Finance Act, 1994. 3. Learned Counsel would submit that appellant is in....

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.... fraudulent act on the part of a Consultant and appellant was under bonafide belief that the Consultant has deposited an amount towards service tax liability. He would also submit that again in an identical issue in the case of Shri Sai Enterprises 2015-TIOL-1586-CESTAT-MUM same view was reached by the Tribunal and held that penalty is not imposable on the assessee. 4. Learned D.R. on the other hand, would submit that the appellant was in the knowledge of the activity undertaken by the Consultant. It is her submission that the statement of the Consultant Mr. Deepak Joshi clearly indicates that appellant had paid only 50% of the amount as has been recorded in the said statement. It is her submission that the cash book and the certificate ....

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....o had pocketed the amounts of service tax which has been paid by the appellant to him to pay into the Govt. treasury. On detailed perusal of the records, we do find that the appellant herein, in the statement recorded by the investigating authorities, has clearly recorded that he had given the amounts to Mr. Deepak Joshi who was the Consultant. It is also recorded that the appellant had insisted Mr. Deepak Joshi that they should pay the amount of service tax by cheque but Mr. Deepak Joshi, the Consultant, had convinced them that the time taken for realization of cheque is more while in the case of cash payment, the challans gets cleared. It is also seen from the statement that Proprietor of the appellant firm was counter that the statement ....

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....s nothing is brought on record that the appellant had knowledge of such an activity undertaken by the Consultant. It is also not on record that the appellant had not paid any amount to the Consultant for the payment of service tax to the department. We find that the Consultant has defrauded the appellant by breaching GAR-7/TR-6 challans. It is also on record that the appellant had discharged the entire service tax liability and the interest thereon. In circumstances herein above we find that the judgement of the Tribunal in the case of Ganesh Enterprises (supra) Shri Sai Enterprises (supra) would cover the situation and in these two cases also facts were identical. 6.3 As regards the submissions made by learned D.R. that appellant has to....