2015 (11) TMI 478 - AT - Service Tax

Penalty u/s 78 - Business Support Service - Misdeclaration - Held that - Appellant had mis-declared the taxable receipts in respect of the transactions which were declared by them to the authorities while filing ST-3 returns, is not disputed. This act itself indicates that the appellant had ulterior motive in suppressing and mis-declaring the taxable transactions. The argument by the learned Counsel before us that the services rendered by them are not taxable is also mis-directed in as much it is on record that the services rendered by them are taxable under some category or others but the appellant despite receiving an amount for the said services, mis-declared the amount to the authorities in order to discharge less service tax which itself is suppression and mis-statement of the tax liability to the authorities. This conduct of the appellant is unbecoming of an assessee who supposed to comply with the provisions of law and more so in this case as the appellant was a registered unit with the authorities. - impugned order which imposes penalty under Section 78 is correct and does not require any interference. - Decided against assessee.

Summary

Issues:
Service tax liability on various services, contesting penalties imposed by adjudicating authority.

Analysis:
The appeal was directed against Order-in-Original No. 44/STC/BR/10-11 dated 25.02.2011, concerning service tax liabilities on multiple services. The appellant, a registered service provider, faced a show cause notice for not discharging service tax obligations on services like Manpower Supply, Business Support Service, Renting of Immovable Property Service, among others. The adjudicating authority confirmed the demand, interest, and penalties under section 78 of the Finance Act 1994, which the appellant contested on both merit and limitation grounds.

The appellant's counsel argued that the tax liabilities were already paid, and the demands were improper. For instance, in the case of Manpower Supply, the appellant claimed it was a reimbursement of actual costs, not a commercial concern. Similarly, for Business Support Service, they argued about printing bills at customer premises. The counsel also disputed the tax liability on commercial coaching classes, stating fees collected were not taxable. The appellant sought leniency, citing payment of tax liabilities and invoking section 80 due to a genuine belief of non-taxability.

The departmental representative contended that detailed investigations revealed the tax liabilities that would have otherwise escaped. They emphasized that the appellant, being a registered unit, should have sought clarification from authorities if in doubt about tax obligations.

After considering arguments from both sides and examining the records, the Tribunal noted that the appellant did not contest the tax liability and interest but challenged the penalties. It was found that the appellant had mis-declared taxable receipts, indicating a motive to suppress and mis-declare transactions. Despite arguments that services were not taxable, the Tribunal held that the services were taxable, and the appellant's actions amounted to suppression and misstatement of tax liability. Consequently, the Tribunal upheld the penalties imposed under Section 78, concluding that the impugned order was correct and did not warrant interference.

In conclusion, the appeal was disposed of by affirming the tax liability, interest, and penalties imposed on the appellant, emphasizing the importance of compliance with tax laws and rejecting the appellant's arguments against penalties.