2014 (7) TMI 1137 - AT - Service Tax

Courier Service - Non filing of returns - Penalty u/s 76 77 & 78 - Held that - National Manager - Accounts of the appellant-firm had clearly admitted to non-payment of Service Tax since October 2003 onwards. From the records it is seen that since October 2003 onwards the appellant-assessee has also not filed Service Tax returns. Even for the earlier period no return has been filed for the period April 2002 to September 2002. From the evidence available on record and from the admission by the National Manager - Accounts of the appellant-firm it is clear that the appellant-assessee did not discharge Service Tax liability. From the investigation report also it is clear that the appellant did not cooperate with the investigating agency with regard to the quantification of the Service Tax liability and therefore as a last resort the Service Tax liability had to be computed based on the balance sheet figures and trial balance figures which were taken out from the computer maintained by the appellant. In these circumstances determination of the Service Tax liability by the adjudicating authority based on the figures/records maintained in the computer cannot be faulted at all. - while re-determining the tax liability from these figures the question of determination of assessable value and tax would automatically arise and therefore the adoption of the figures in the balance sheet as cum-tax value by the adjudicating authority cannot be faulted - Decided partly in faovur of Revenue.

Summary

Issues:
Service Tax Demand, Cenvat Credit, Export of Service, Additional Evidence, Non-Payment of Service Tax, Non-Cooperation with Investigation, Imposition of Penalties, Cum-Tax Benefit

Service Tax Demand:
The appellant, a courier service provider, faced a Service Tax demand of Rs. 2,84,07,647 for not discharging Service Tax liability from October 2003 onwards despite collecting it from customers. An investigation revealed a significant gap between declared and actual values, leading to a demand for unpaid Service Tax. The appellant's claim for Cenvat credit and export proceeds exemption was contested due to lack of evidence and non-cooperation with authorities. The adjudicating authority determined the liability at Rs. 2,84,07,647, considering cum-tax benefit and penalties under Sections 77 and 78 of the Finance Act, 1994.

Cenvat Credit and Export of Service:
The appellant contended that they were eligible for Cenvat credit and had export proceeds exempt from tax. However, their failure to provide supporting documents and non-cooperation with the investigation led to the rejection of additional evidence submitted during the appeal. The Tribunal deemed the documents inadmissible due to non-compliance with conditions for their submission, ultimately rejecting the appellant's claims related to Cenvat credit and export proceeds.

Non-Payment of Service Tax and Imposition of Penalties:
The National Manager - Accounts admitted to non-payment of Service Tax since October 2003, with only partial deposits made towards the liability. The appellant's lack of filing Service Tax returns and non-cooperation with authorities resulted in the computation of liability based on balance sheet and trial balance figures. The Tribunal upheld the adjudicating authority's decision, emphasizing the appellant's non-compliance with tax obligations and justifying the imposition of penalties for non-payment and non-cooperation.

Cum-Tax Benefit and Appeal by Revenue:
The Revenue challenged the cum-tax benefit granted by the adjudicating authority, arguing that the figures used for determination already included tax liability paid by the appellant. The Tribunal upheld the cum-tax benefit decision, stating that the figures from audited balance sheets naturally encompassed discharged tax liabilities. Consequently, the Revenue's appeal was deemed meritless, and the impugned order was upheld, dismissing both the appellant's and Revenue's appeals.

This detailed analysis covers the various issues raised in the legal judgment, addressing the Service Tax demand, Cenvat credit, export of service, additional evidence submission, non-payment of Service Tax, penalties imposed, and the cum-tax benefit decision upheld by the Tribunal.