2024 (4) TMI 170 - AT - Service Tax

Recovery of service tax alongwith interest and penalty - Business Auxiliary service - non-filing of ST-3 returns within the prescribed time limit - non-payment of late fee for delayed filing of ST-3 returns - Extended period of Limitation - period April 2011 to March 2012 - HELD THAT - In the impugned order the Commissioner (Appeals) relied on the decision of this Tribunal in Surendra Singh Rathore to hold that the settled legal position is that the activities of the appellant are chargeable to service tax and therefore upheld the demand. It needs to be pointed out that even as per the self assessment by the appellant in its ST-3 returns the appellant had rendered business auxiliary services; the amount received for these services and the tax payable were also indicated. There was no doubt in the minds of either the appellant or the officers that the settled legal position was that the activities of the appellant were exigible to service tax. It is for this reason that the appellant had obtained service tax registration self-assessed the amount of service tax payable and had also filed ST-3 returns accordingly. However the appellant failed to deposit the service tax. It is not open for the appellant to now say that his activities did not amount to rendering taxable services at all when his own self assessment was to the contrary. It is also not in dispute that the appellant had delayed filing of ST-3 returns and had not paid the appropriate late fee as required under the rules. It is found that the demand of service tax with interest the late fee and the penalties imposed on the appellant are correct and proper and call for no interference. The impugned order is upheld and the appeal is dismissed.

Summary

Issues involved:
The issues involved in this case are:
1. Liability to pay service tax under "business auxiliary service" u/s 65(19) of the Finance Act, 1994.
2. Delayed filing of ST-3 returns and non-payment of service tax by the appellant.
3. Imposition of penalties under sections 76 & 77 of the Finance Act.

Details of the judgment:

Issue 1: Liability to pay service tax under "business auxiliary service" u/s 65(19) of the Finance Act, 1994:
The appellant, engaged in promoting products of a company, was registered with the Service Tax Department for business auxiliary services. Despite declaring taxable value and service tax payable in ST-3 returns, the appellant failed to pay the service tax on time. The Commissioner (Appeals) upheld the demand, citing the Tribunal's decision that such activities are subject to service tax. The appellant's self-assessment and registration indicated awareness of the tax liability, making the demand justified.

Issue 2: Delayed filing of ST-3 returns and non-payment of service tax by the appellant:
The appellant's delayed filing of ST-3 returns and failure to pay the late fee as required were noted. A show cause notice was issued, leading to the confirmation of the demand for service tax with interest, late fee, and penalties. The Tribunal found the demand and penalties imposed to be correct, given the appellant's non-compliance with filing and payment obligations.

Issue 3: Imposition of penalties under sections 76 & 77 of the Finance Act:
The appellant contended that no penalty should be imposed due to the interpretational nature of the issue and the alleged inapplicability of the extended limitation period. However, the Commissioner (Appeals) upheld the penalties, citing deliberate disregard for the law by the appellant. The Tribunal affirmed the penalties, finding them appropriate and justified in the circumstances.

Therefore, the Tribunal upheld the impugned order, dismissing the appeal and affirming the demand for service tax, interest, late fee, and penalties imposed on the appellant.