2018 (8) TMI 799 - AT - Service Tax

Manpower Recruitment Agency Service - demand of service tax with penalty - evasion of duty - suppression of facts - Held that - The Revenue s allegation is based upon the bank statements as also the bills procured from their clients. In such a scenario the submission made by the ld.Advocate that the figures have not been picked up from the balance sheet does not carry any weight. The appellants have not strongly contested the matter before the lower authorities - appeal dismissed - decided against appellant.

Summary

Issues: Allegation of suppression of service provided by the appellant, comparison of bank statements and bills with Service Tax returns, justification for demand and penalty imposed.

Analysis:

1. Allegation of Suppression of Service Provided: The appellant, registered as a 'Manpower Recruitment Agency,' was providing taxable services to clients and discharging Service Tax liability accordingly. The Revenue alleged that the appellant suppressed the quantum of services provided, leading to evasion of duty amounting to ?2,93,240. The Revenue based its claim on discrepancies between bank statements, bills from clients, and the Service Tax returns.

2. Comparison of Bank Statements and Bills with Service Tax Returns: The appellant's advocate argued that the demand was raised using bank statements and bills from clients, while the balance sheet figures indicated a lower quantum of work done. On the contrary, the Revenue contended that the appellant did not reflect the entire work in their balance sheets, thus suppressing the services provided to clients.

3. Justification for Demand and Penalty Imposed: The Tribunal reviewed the impugned orders and observed that the show cause notice accused the appellants of suppressing the quantum of services provided, not fully recorded in their records. The Revenue's claim was supported by bank statements and bills from clients. The Tribunal noted the lack of strong contestation by the appellants before lower authorities and found no reason to interfere with the demand or penalty imposed. Consequently, the appeal was rejected.

This judgment highlights the importance of maintaining accurate records and transparency in financial dealings to avoid allegations of suppression and evasion. The Tribunal emphasized the significance of documentary evidence, such as bank statements and bills, in determining tax liabilities. The decision underscores the need for businesses to diligently comply with tax regulations and actively participate in legal proceedings to defend against allegations of non-compliance.