TaxTMI 
TaxTMI 
2008 (4) TMI 103
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..... 48,184/- as service tax, the same is adjusted and an amount of Rs. 3,39,488/- is determined as service tax short paid by the party on the escaped value of taxable services, which is recoverable from them. (ii) Interest at the appropriate rate is also recoverable under Section 75 of Finance Act, 1994 for the period of default. (iii) A penalty of Rs. 1,66,600/- is imposed under Section 76 of Finance Act, 1994. (iv) A penalty of Rs. 3,39,488/- is imposed under Section 78 of Finance Act, 1994. (v) A penalty of Rs. 33,949/- is imposed upon them under Section 79 of Finance Act, 1994. Similarly, the Assistant Commissioner vide Order-in-Original No. 36/AC-I/ADJ/ST/SA/05 dated 20-4-2005 in the case of M/s. Magnum International has ordered as under :- (i) The amount of service tax for the period 16-10-98 to March, 2002 is assessed as Rs. 19,89,148/- under Section 73 of Finance Act, 1994 on gross amount of Rs. 3,97,82,951/- collected by the party M/s. Magnum International. However, as the party has already paid an amount of Rs. 1,82,964/- as service tax, the same is adjusted and an amount of Rs. 18,06,185/- is determined as service tax short paid by the party on the escaped value of t....
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....ed to the Department. They stated that the bills showing the gross amount and their percentage service Charges and Service Tax computation on such charges were furnished to the Superintendent (T) / Service Tax for the month of March, 99 in February and March 2000, for April 2000 vide their letter delivered on 13-5-2000 and 21-6-2000 and to Deputy Commissioner (along with the bills of August 2000) on 22-9-2000. Thus all the primary material facts stood furnished as required under Section 73 of the Finance Act, 1994. They also stated that in regard to M/s. Magnum Security Services also the gross payments received stood furnished to the Department on 13-10-2000, 30-10-2000 from M/s. Satyam, ACC and Sharma Engine Valves, besides through the appellant's letters of identical dates. 9. The appellants submitted that an assessee is under legal obligation to disclose only Primary Material facts and not the Inferential Facts. That they were receiving specified fixed percentages of the actual reimbursement on personnel as Service/Supervision Charges whereon Service Tax was paid was the primary material facts wherefrom the gross billing figure could be inferred-computed by simple arithmetic ca....
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....re filed for the first time on 1-2-2000. When returns themselves for the first time were filed in February, 2000 and the Department became aware of the service tax being paid by the appellants, the Department could only thereafter proceed further to call for information under Section 71(2) for finalization of assessments. A reading of these returns would reveal that in the returns, under the heading, "Value of Taxable Services Charged or Billed", certain amounts have been shown. Similar amounts have been shown under the heading, "Value of Taxable Services Realized". What these amounts really are could only be verified if the appellants furnished complete and true details of the amounts realized from their clients for the said periods. This can be done by furnishing, if not original, at least photocopies of the bills/invoices raised on their clients and the amounts received against each of them. Since no such details or documents were made available to the Department, the Superintendent, Central Excise wrote to the appellants vide his letter dated 15-2-2000, asking the appellants to submit bills raised on their customers and the gross amounts collected monthwise. The details were ag....
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....%. If that be so, it would not have been correct on the part of the Supdt. to multiply the supervision/service charges by flat 10 to work out the gross amounts in the absence of full details. To verify the correctness of the tax assessed by the appellants, they are required to produce any accounts, documents or other evidence as the Supdt. deems necessary for such verification. In the facts of the present case, we find that the appellants have failed to disclose wholly or truly all material facts required for verification of the assessment under Section 71 of the Act with the result the value of taxable service has escaped assessment and, therefore, five years period is rightly invocable in terms of Section 73(1)(a) of the Act for demanding the balance service tax amount. Therefore, the differential amounts between the gross amounts and the supervision charges were the values of taxable services, which had escaped assessment, for the reason that the appellants never truly or wholly declared all the material facts. It is not a case of non-disclosure of the inferential facts but a case of non-disclosure of the primary material facts, which handicapped the Supdt. to verify the correct....