2014 (7) TMI 118 - AT - Service Tax

Erection and commissioning service - Tax collected but not paid - Held that - During the period in dispute appellant had collected the service tax as provider of taxable service, this fact is admitted even in the statement of facts in para 5 of the appeal filed before the Tribunal. As appellant collected tax as provider of taxable service the same was deposited only in the year 2006 though the same also relates to the year 2005. In these circumstances, we find no merit in the contention of the appellant that appellants are not liable to pay service tax as provider of erection, commissioning and installation service - As the appellant had collected the service tax and retained the same even without disclosing to the Revenue - Decided against assessee.

Summary

Issues:
1. Confirmation of demand for service tax on erection and commissioning services.
2. Appellant's contention of not being liable for service tax and penalties.
3. Appellant collecting service tax but not paying it to the Revenue.
4. Applicability of penalties on the appellant.

Analysis:

The judgment by the Appellate Tribunal CESTAT Mumbai involved the confirmation of a demand for service tax on erection and commissioning services provided by the appellant. The impugned order confirmed a demand of Rs. 1,10,80,626/- along with interest and penalties. The appellant argued that they should not be liable to pay service tax as the services provided fell under works contract. Additionally, the appellant contended that if the demand is confirmed, they should not be liable for penalties. However, the Revenue supported the demand, stating that the appellant had collected service tax during the disputed period but had not paid it to the Revenue, justifying the imposition of penalties.

The Tribunal noted that the appellant had indeed collected service tax as a provider of taxable services during the disputed period. Despite the appellant's argument that the services provided should be considered as works contract, the Tribunal found no merit in this contention. It was observed that the appellant had collected the tax in 2006 for services provided in 2005, without disclosing this fact to the Revenue. Consequently, the Tribunal upheld the demand for service tax on erection, commissioning, and installation services, dismissing the appeal.

In conclusion, the Tribunal found no infirmity in the impugned order, as the appellant had collected service tax but failed to disclose this information to the Revenue. Therefore, the appeal was dismissed, and the appellant was held liable for the confirmed demand for service tax along with penalties.