TaxTMI 
TaxTMI 
2024 (10) TMI 1402
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....eld to be recoverable from the party. 2. I impose penalty of Rs.5, 000/- u/s 77 of the Act for violation of Section 70 readwith Rule 7 of the Rules. 3. I impose penalty Rs. 6,69,879/- under Section 77 of the Finance Act, 1994. However, penalty imposed under this Section shall stand reduced to 25% of the Service Tax amount if the entire dues including Service Tax, Interest and penalties imposed as above are paid within 30 days from receipt of this order." 2.1 Appellant is registered as service provider mainly to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco Industries Ltd. as service recipient, it was observed that appellant was providing taxable services under the category of Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient. However, they have not discharged the service tax due in respect of these services. 2.3 After completion of investigation and inquiry, a show cause notice dated 11.10.2010 was issued to the appellant asking them to show cause as to why:- "1. The service tax amounting to Rs. Rs. 859,048/- (Service Tax Rs. 8,39,269/....
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....unt pertaining to a particular service not taxable prior to a particular date, benefit of threshold limit exemption, service amounting to manufacture and material handling within the plant not falling under the purview of service tax. Calculation chart provided by the party is as under- Summary of calculation for tax liability of M/s Anil Construction Co., Main Road, Murdhawa, Renukoot, Sonebhadra Details Amount Amount Gross Turnover as per SCN 1,89,90,951.00 Less PF included in gross turnover 18,25,616.00 Less service prior to 16.06.2005 4,06,784.00 Less service tax paid by M/s Hindalco 14,47,807.15 36,80,207.15 Add. Service not to be included in service prior to 16.06.05 22,953.00 Net taxable turnover 1,53,33,696.85 Service Tax 15,79,370.78 Less service tax already paid as per SCN 13,27,201.00 Net tax payable 2,52,169.78 That the party submitted that he is a petty contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom prop....
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....he SCN." 4.4 The only dispute was in respect of demand of service tax on the amount towards provident fund. On perusal of the invoices, we do not find any amount to be indicating any amount as provident fund. After going through the definition of value of taxable services adjudicating authority has observed as follows:- "No deduction under the Head "Provident Fund" is permissible in the above provisions and I therefore, hold that the taxable value of Rs.18,25,616/- for which deduction has been claimed by the party is part of the value of taxable services and is not allowed." 4.5 In the impugned order, First Appellate Authority has observed as follows:- "In view of the above, I do not find any merit in the appellant's prayer insofar as the confirmation of demand of service tax on PF amount is concerned. In any case in the show cause notice dated 11.10.2010, there is just no mention of any amount representing PF. There is nothing on record to indicate and prove that amount claimed to represent provident fund actually related to PF. In any case in terms of following Circular of C.B.E.C. [F. No. B1/6/2005-TRU, dated 27-7-2005], PF is not excludible. The relevant portion of the ....
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.... and documents on record that during the relevant period party has not disclosed anything to the department inspite of the fact that they have rendered taxable services and received payment thereof and also the amount of Service Tax and later also obtained service tax registration and charged service tax from the clients. The gross amount received by the party against providing taxable services was not disclosed to the department with clear intent to evade the payment of service tax. If the department would not have initiated enquiry the party might have escaped from paying due tax to the government. I also take note of the charges of non-payment/short payment which have not been rebutted by the party. It is also a fact that the party failed to discharge the statutory burden of declaring the value of taxable service to the department which amounts to suppression of facts, and provision of extended period is invokable in this case. Accordingly, I hold that the proviso of section 73 (1) of the Finance Act has rightly been invoked and therefore the demand is not barred by limitation. Further, as regards, the payment of interest is concerned the same is payable under Section 75 of t....
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....service recipient which clearly shows the bad intention of the party." 4.8 The above findings cannot be disputed, as the appellant was well aware that he was providing taxable services and short paid the service tax, even after issuing invoices indicating the services tax payable and collecting the same from the service recipient. They were not filing the ST-3 returns on time in the manner as specified in law. They have suppressed the information with intend to evade payment of taxes. Accordingly, the demand by invoking the extended period of limitation and penalty imposed cannot be disputed with. In case of Afsar Tour and Travels [2019 (28) G.S.T.L. 153 (Tri. - Hyd.)] Hyderabad bench has observed as follows: "9. We have carefully considered the submissions made by both sides and arguments. It is not in dispute that the appellant had provided cabs along with drivers from M/s. BSNL & BDL and two other rent-a-cab operators and collected the amounts from them. They have also collected service tax from some and had not deposited the same before the issue of show cause notice. It was never in dispute the service rendered by them amounts to rent-a-cab service and tax is liable thereon....