TaxTMI 
TaxTMI 
2024 (10) TMI 1462
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....party alongwith interest under the provisions of section 75 of the Finance act, 1994 as amended from time to time. This amount is held 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 read with Rule 7 of the Rules. 3. I impose penalty Rs. 10,13,148/- under Section 78 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 providing services 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 Business Auxiliary Services, Cargo handling Services, Cleaning Services, Erection Commissioning & Installation Services, Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient. However, they have short pai....
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....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 A B Enterprises GG 27 Hindalco Colony, Renukoot, Sonebhadra Details Amount Amount Gross Turnover as per SCN 3,56,93,932.00 Less PF included in gross turnover 17,16,256.00 Less Service upto 16.06.2005 9,39,938.00 Less service tax paid by M/s Hindalco 39,12,896.07 65,69,090.07 Net taxable turnover 2,91,24,841.93 Service Tax 35,73,542.00 Less service tax already paid as per SCN 30,29,050.00 Net tax payable 5,44,492.00 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 proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return th....
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....rt of the total amount of. Rs. 3,56,93,932.00 or not. I also find in this regard that the party has also not submitted any, record to verify their contention. I have to therefore, determine the veracity of the contention of the, party from the circumstantial evidence. I take note in this regard that in case the contention of the party is accepted the Service Tax liability shall reduce than the amount of Service Tax received by the party from M/s Hindalco. As regards the admissibility of deductions, I find that this amount has been claimed to have been paid by M/s. Hindalco who are an educated Assessee as Service Tax to the party, and the payment by M/s. Hindalco is obviously would have been made only after scrutiny of the Bill/ Invoice issued by the party and had it been correct that the Service Tax was excessively calculated in such Bills/ Invoices, they would have pointed out and got the Bills/ Invoices corrected. I also take note in this regard that the party would have assessed the Service Tax prior to raising the Bills/ Invoices as per Section 70 of the Finance Act, 1994. There are hardly any circumstances to believe the theory of payment of Service Tax amount of more....
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....t 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 the Finance Act, 1994 on the due amount of service tax payable. In this regard 1, place reliance on the judgment of Hon'ble Supreme Court reported in 2008(231) ELT- 3(SC) which held that: interest is automatically payable once it is held that tax was not paid by due date. Now I take up the proposal for imposition of penalty under Section 76, 77 and 78 of the Finance Act, 1994. As regards imposition of penalty under Section 76 and 78 of the ....
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.... of the appeal is that (i) a separate SCN have been issued for the PF portion which is under adjudication. This amount has been considered again in the present order. (ii) It was admitted in the impugned 0-I-0 that amount of service tax of Rs. 39,12,896/- had been paid by M/s Hindalco Industries Ltd. to the service provider but no deduction was made on this account to arrive at correct gross value for the purpose of tax liability and (ii) Quantification of demand of Rs. 10,13,148/-, confirmed in the impugned 0-1-O was not factually as well as arithmetically correct. 7. I have gone through the facts of the case and the material available on record as also the submissions of the appellants with reference to the impugned Order-in-Original dated 18.07.2011. It is an admitted fact that the appellants did not contest the Show Cause Notice dated 11.10.2010 on merits. There is no dispute regarding providing of services and receipt of value of taxable service. The appellants are apparently aggrieved on account of the fact that a separate show cause notice on the PF amount. of Rs. 17,16,256/- has been issued. This amount has been considered again in the present order. Accordingly, a....
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....ndividual's employment may be laid down in a formal contract or letter of appointment or on a less formal basis. What is relevant is that the staff are not contractually employed by the recipient but come under his direction. 22.4 Service tax is to be charged on the full amount of consideration for the supply of manpower, whether full-time or part-time. The value includes recovery of staff costs from the recipient e.g. salary and other contributions. Even if the arrangement does not involve the recipient paying these staff costs to the supplier (because the salary is paid directly to the individual or the contributions are paid to the respective authority) these amounts are still part of the consideration and hence form part of the gross amount. 8. The appellants are apparently aggrieved on account of the fact that amount of service tax of Rs. 39,12,896/- had been paid by M/s Hindalco Industries Ltd. to the service provider but no deduction had been made on this account to arrive at correct gross value for the purpose of tax liability. I find that the issue was taken up by the adjudicating authority and he referred the matter to the officers of concer....
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....ount. In view of above, I find no strength in the contention of the appellants. In fact the aforesaid finding of the adjudicating authority exposes the deception and fraud of the appellant inasmuch as while they received Rs. 39,12,896/- on account of service tax, they deposited only Rs. 30,29,050/-. I also find that the adjudicating authority has already provided the benefit on the amount of Rs. 9,39,938/- received by the appellants for the services provided by them during the period prior to 16.06.2005 holding that impugned service was not taxable prior to 16.06.2005. 9. I find that the appellants have put forth various grounds whereby they have contested the impugned show cause notice as well as impugned order. It is on record that the appellants in their defence reply submitted before the adjudicating authority, has categorically stated that they did not wish to contest the impugned show cause notice on merits. The adjudicating authority in this regard has observed and held as under - "I have gone through the records of the case as well as submissions of the party. The party is not contesting that they were engaged in providing the taxable services as discussed....
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....ties have observed that appellant had received Rs 39,12,896/- as Service Tax from M/s Hindalco but have deposited only Rs. 30,29,050/- with the exchequer. Thus appellant have not deposited the total amount received from M/s Hindalco as Service Tax with the exchequer. With this observation both authorities also observe there is no evidence to show that appellant has received this amount as service tax from M/s Hindalco as Service Tax. We are not in position to agree with the said finding disallowing the deduction so claimed by the appellant. 4.9 That being so, the quantum of short payment needs to be re-determined after allowing the deduction of the amount claimed by the appellant to be towards service tax paid by Hindalco. For the limited purpose of re-computing the demand after allowing this deduction from the gross value matter is remanded back to the original authority. 4.10 The findings recorded by the authorities below cannot be disputed in respect of limitation, 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 rec....
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....ered 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. Even when they collected the service tax, they have not deposited with the Government. The assessee has also not filed ST-3 returns and thereby suppressed the fact that they have rendered taxable services and collected service tax and retained the same with them. The only defense by the appellant before the lower authority and the First Appellate Authority and even in the grounds of appeal before this Bench is that they will pay the service tax if their clients reimburse the same to them. Otherwise, they have not paid the service tax. The leviable of service tax does not change that whether or not they have collected same from their clients. We cannot accept a new ground of liability of service tax at this stage, proposed by the Learned C....