2014 (12) TMI 372 - AT - Service Tax

Security services - Interest u/s 75A - Penalty u/s 76, 77 & 78 - Invocation of extended period of limitation - Held that - From the records, it is evident that the appellant did not cooperate with the department and did not furnish the copy of the bills raised on various service recipients. Therefore, the department was constrained to take the figures from the books of account and audited balance sheet for computation of the demand. In these circumstances, the appellant s contention that the Revenue did not provide copies of the documents relied upon is totally devoid of merits and has to be rejected outright. It is also seen from the statements given by the various officers including one Director of the appellant company and also the statements given by the recipient of the services that the appellant has been rendering security agency services to the clients and has charged Service Tax for the services rendered during the impugned period. However, the appellant did not take out any Service Tax registration nor comply with any of the statutory requirements. They also did not remit the Service Tax collected from their customers to the exchequer. Thus, the demand of Service Tax based on the figures furnished in the audited balance sheet of the appellant firm is sustainable in law. Invocation of extended period of time is also sustainable inasmuch as the appellant deliberately withheld the details of the services rendered from the department and accordingly confirmation of demand invoking the extended period of time is correct in law. Consequently, all the penal provisions would ensue and the penalties imposed on the appellant firm under Sections 75A and 76 for default in payment of Service Tax and under Section 77 for not filing the returns and compliance of the statutory provisions and under Section 78 for evasion of Service Tax by indulging in suppression of facts and wilful misstatement are liable to be confirmed. - Decided against assessee.

Summary

Issues:
1. Failure to appear for hearing despite notice.
2. Non-registration with Service Tax department and non-payment of Service Tax liability.
3. Violation of principles of natural justice.
4. Non-cooperation with the department.
5. Imposition of penalties under various sections of the Finance Act, 1994.

Analysis:
1. The appellant failed to appear for the hearing despite multiple notices, leading to the appellate Tribunal deciding to proceed with the appeal as per the provisions of the Central Excise Act and the Finance Act. The appeal pertained to the appellant's failure to register with the Service Tax department and discharge their Service Tax liability for services rendered during a specific period.

2. The appellant, a security services provider, did not register with the Service Tax department or pay the Service Tax on the consideration received for services rendered from October 1998 to July 2003. A show cause notice was issued demanding Service Tax along with interest and penalties. The appellant did not attend the personal hearing granted on multiple occasions, leading to the confirmation of demands and penalties by the lower appellate authority.

3. The appellant alleged a violation of natural justice, claiming they were not provided with certain seized documents and were not heard before the order was passed. The Revenue refuted these claims, stating that the appellant had opportunities to defend their case but did not avail them. The Revenue computed the demands based on available records as the appellant did not submit required documents during the investigation.

4. The Revenue highlighted the appellant's non-cooperation, citing statements from officers and service recipients confirming the receipt of services and payment of Service Tax. The appellant's deliberate defiance of the law, failure to register for Service Tax, and non-remittance of collected taxes were emphasized to justify the penalties imposed under various sections of the Finance Act.

5. The Tribunal upheld the lower authorities' decision, noting the appellant's lack of cooperation, failure to provide necessary documents, and non-compliance with statutory requirements. The demand for Service Tax, penalties for default in payment, non-filing of returns, evasion of taxes, and imposition of penalties on the appellant and the director were deemed legally justified. Consequently, the appeal was dismissed for lack of merit.

This detailed analysis of the judgment covers the issues of non-appearance, non-registration with the Service Tax department, violation of natural justice, non-cooperation, and imposition of penalties, providing a comprehensive overview of the legal proceedings and decisions made by the Tribunal.