2018 (11) TMI 1039 - AT - Service Tax

Extended period of limitation - Penalty - Failure to discharge to service tax - repair and maintenance service of automation machines - Held that - It is not in dispute that the appellant had provided management, maintenance or repair service during the relevant period but failed to discharge service tax even though the same was collected along with their service charges. Neither in the appeal memorandum nor during the course of hearing the appellant has produced evidences to rebut the said findings of the Learned Commissioner. Since during the relevant period the appellant had collected service tax but not deposited with the Government, there is no reason not to invoke the extended period of limitation and impose penalty under Section 78 and other provisions of Finance Act, 1994 as has been done by the adjudicating authority in the order impugned. Appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against Order-in-Original for non-payment of service tax, imposition of penalty under Section 78 of the Finance Act, 1994, appellant's financial constraints as a defense, failure to deposit collected service tax, confirmation of demand with interest and penalty, absence of evidence to rebut findings, invocation of extended period of limitation, upholdance of impugned order, dismissal of appeal.

Analysis:

1. Non-Payment of Service Tax and Imposition of Penalty:
The appeal was filed against an Order-in-Original for non-payment of service tax despite collecting it from customers. The appellant provided repair and maintenance services but failed to discharge the service tax amount. The Commissioner confirmed the demand with interest and penalty. The appellant argued financial constraints during the relevant period as a defense against the penalty under Section 78 of the Finance Act, 1994. However, the Tribunal noted that the appellant had collected service tax but failed to deposit it with the government, leading to the imposition of penalties.

2. Confirmation of Demand and Lack of Rebuttal Evidence:
The Commissioner's findings highlighted that the appellant collected service tax from customers but did not deposit it with the government, starting from December 2007. The invoices and statements provided corroborative evidence of the collection of service tax. The Tribunal observed that the appellant did not produce any evidence to counter these findings. As a result, the Tribunal upheld the confirmation of demand with interest and penalty, as per the impugned order.

3. Invocation of Extended Period of Limitation and Dismissal of Appeal:
The Tribunal found no reason to refrain from invoking the extended period of limitation and imposing penalties under Section 78 and other provisions of the Finance Act, 1994. Despite the appellant's arguments regarding financial constraints, the failure to deposit the collected service tax was a crucial factor. Consequently, the Tribunal upheld the impugned order and dismissed the appeal, emphasizing the statutory obligation to deposit service tax collected from customers.

In conclusion, the Tribunal's judgment focused on the appellant's failure to deposit collected service tax, leading to the confirmation of demand with interest and penalty. The lack of rebuttal evidence, coupled with the invocation of the extended period of limitation, supported the decision to uphold the impugned order and dismiss the appeal.