2021 (8) TMI 541 - AT - Service Tax

Non-payment of service tax - inclusion of out-of-pocket expenses in the demand not ascertainable - no details submitted in this regard - HELD THAT - The appellant had not entered appearance before the original authority on the plea that they intend to subject themselves before the Settlement Commission. There is no evidence of such having occurred, and indeed, the filing of appeal before us is clear indication of incorrect averment having been made before the original authority. In the grounds of appeal too, no concrete counters to the findings of the original authority have been enumerated. The grounds of appeal are vague and insufficient to determine a finding on merit. The appellant has also foregone several opportunities to appear and to elaborate upon the grounds preferred in the appeal. Appeal dismissed.

Summary

Issues:
Appeal against order confirming demand for management or business consultant service, imposition of penalties, and non-deposit of collected funds in the Consolidated Fund of India.

Analysis:
The appellant, M/s Worbus Management Consultants Ltd, challenged the order-in-original by the Commissioner of Customs confirming a demand of &8377; 9,55,178/- under section 73(1) of Finance Act, 1994, for management or business consultant services from 2006-07 to 2010-11, and &8377; 15,06,227/- under section 66A for 2006-07 to 2007-08. The appellant was also directed to pay &8377; 10,57,485/- collected from customers not deposited in the Consolidated Fund of India. The appellant failed to appear and had not entered any representation in the proceedings, claiming intent to apply to the Settlement Commission. However, no evidence of such application was found, and the appeal to the Tribunal indicated incorrect averments before the original authority.

The appellant contended that the tax liability for management services had been discharged, challenging the imposition of penalties. Additionally, regarding the &8377; 15,06,227/- liability under section 66A, it was argued that the nature of expenses had not been scrutinized. The Authorized Representative argued that the inclusion of 'out-of-pocket expenses' in the demand was unverifiable due to lack of details submitted, making it challenging to rebut the claim at that stage. The Tribunal noted the absence of concrete counters to the original authority's findings in the vague and insufficient grounds of appeal, leading to the dismissal of the appeal and upholding of the original order.

In conclusion, the Tribunal dismissed the appeal, upholding the order of the original authority. The appellant's failure to appear, lack of concrete counters to the findings, and the absence of evidence supporting the intent to apply to the Settlement Commission led to the rejection of the appeal, affirming the demand and penalties imposed by the Commissioner of Customs.

(Order pronounced in the open court on 05/08/2021)