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2018 (8) TMI 1281 - AT - Service TaxRent-a-cab Service - It is alleged by the Department they provided taxable services and collected charges for vehicles but were not paying the same to the Government - appellant submitted that whenever their clients reimbursed the service tax to them, the same has been deposited with the Government and the service tax is not paid only when the same is not reimbursed by their clients. Held that - 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 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 Counsel for the appellant because there was never a point of contention at the time of Order-in-Original or Order-in-Appeal. Appeal dismissed - decided against appellant.
Issues:
1. Service tax liability of the appellant for Rent-a-Cab Operator services. 2. Non-payment of service tax collected by the appellant. 3. Imposition of penalties under Sections 76, 77, 78 of the Finance Act, 1994. 4. Dispute regarding reimbursement of service tax by clients. 5. Applicability of service tax on services provided to other rent-a-cab operators. Service Tax Liability for Rent-a-Cab Operator Services: The appellant, registered for taxable Rent-a-Cab Operator services, failed to file statutory returns or discharge correct service tax liability. The Department alleged non-payment of collected charges to the Government, leading to investigations and a show cause notice. The Joint Commissioner confirmed demands, interest, and penalties, based on the quantification of services from the appellant's balance sheet figures. The appellant's defense that service tax was not payable if not reimbursed by clients was rejected, leading to the Order-in-Original. Non-Payment of Collected Service Tax: The appellant collected service tax from clients but did not deposit it with the Government, as revealed during investigations. Despite collecting service tax, the appellant failed to file ST-3 returns, suppressing the fact of providing taxable services and retaining the collected tax. The appellant's argument of paying service tax only upon client reimbursement was not accepted, as the liability remained regardless of actual collection from clients. Imposition of Penalties under Sections 76, 77, 78: The Joint Commissioner imposed penalties under various sections of the Finance Act, 1994, except under Section 76. The appellant challenged these penalties before the Commissioner (Appeals) on grounds of lacking clear findings on the intention to evade service tax payment. However, the appeal was dismissed, upholding the penalties imposed in the Order-in-Original. Dispute Regarding Reimbursement of Service Tax by Clients: The appellant contended that service tax was not paid when clients did not reimburse it, arguing that the liability was contingent on client actions. This argument was not accepted, as the liability to pay service tax existed irrespective of client reimbursement, as per the findings of the lower authorities and the First Appellate Authority. Applicability of Service Tax on Services to Other Rent-a-Cab Operators: The appellant argued against the liability to pay service tax on services provided to other rent-a-cab operators, claiming that the turnover in their balance sheet included commissions received for vehicles supplied to these operators. However, the authorities maintained that the appellant's services amounted to rent-a-cab services, and the liability for service tax remained, leading to the dismissal of the appeal by the CESTAT. In conclusion, the CESTAT upheld the Order-in-Original and the penalties imposed, dismissing the appeal of the appellant based on the findings regarding service tax liability, non-payment of collected tax, and the applicability of penalties under the Finance Act, 1994.
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