2024 (2) TMI 878 - AT - Service Tax

Non-payment of service tax - recovery agent services - confirmation of demand alongwith interest and penalty - HELD THAT - Nothing has been brought out in the memo of appeal to contradict the finding recorded by the Commissioner (Appeals) that the appellant rendered recovery agent service. The Commissioner (Appeals) granted relief to the appellant for the Financial Year 2010-11 and 2013-14, since the appellant was entitled for benefit of exemption upto the value of Rs. 10 lakhs. The relief for the Financial Year 2009-10 was not granted as the appellant did not produce any evidence. The demand was, accordingly, reduced from Rs. 8,13,338/- to Rs. 6,65,559/-. Penalty - suppression of facts or not - HELD THAT - The Commissioner noted that the appellant had suppressed facts from the department as such facts could only be obtained from the ICICI Bank and, therefore, the penalties were correctly imposed. However, the quantum of penalty under section 78 of the Finance Act was reduced to Rs. 6,65,559/-. There is, therefore, substance in the submissions advanced by the learned authorized representative appearing for the department that there is no error in the order passed by the Commissioner (Appeals) - The appeal is, accordingly, dismissed.

Summary

Issues involved: Failure to appear in proceedings, Service tax liability for recovery agent services, Threshold exemption, Imposition of penalty.

Failure to appear in proceedings: The appellant failed to appear before the Commissioner (Appeals) and also did not attend the hearing at the Appellate Tribunal. The Commissioner proceeded to decide the appeal on merits due to the absence of the appellant on multiple occasions.

Service tax liability for recovery agent services: The appellant worked as a collection agent for a bank engaged in advancing loans and repossessing vehicles in case of default. A show cause notice was issued stating that the appellant provided taxable 'recovery agent services' but did not pay service tax. The Additional Commissioner confirmed the demand for service tax, interest, and penalty.

Threshold exemption: The Commissioner (Appeals) found that the appellant was entitled to threshold exemption for certain financial years based on the total receipts falling within the prescribed limit. However, the exemption was not granted for one financial year due to lack of evidence, resulting in a reduced demand for service tax.

Imposition of penalty: The Commissioner upheld the penalties imposed under Sections 77 and 78 of the Finance Act, stating that the appellant had contravened the provisions of the Act, suppressed facts from the department, and failed to comply with the law. The penalty amount under Section 78 was reduced based on the circumstances.

Conclusion: The Appellate Tribunal upheld the order of the Commissioner (Appeals) dismissing the appeal, as there was no error found in the decision regarding the service tax liability, threshold exemption, and imposition of penalties. The appellant's failure to appear in the proceedings and the Commissioner's detailed findings supported the dismissal of the appeal.