2017 (3) TMI 246 - AT - Service Tax

Late payment of tax - failure to obtain registration - appellant claim that there was no intention to evade tax, and the failure was only due to ignorance - Held that - the appellant has paid dues after much delay. The delay has been of various period ranging upto 36 months. Invoice shows that the said receiver was availing credit of the same. The service provider has operated for almost two years without taking registration - the registration was obtained on 12/11/2008 only after the visit of Central Excise Officers - the intention to evade duty cannot be denied - appeal dismissed - decided against appellant.

Issues:
1. Service tax demand against the appellant and penalties imposed under Sections 76, 77 & 78 of the Finance Act.
2. Argument regarding willful default in payment and timely tax payment by the appellant.
3. Lack of service tax registration initially due to ignorance and subsequent registration in 2008.
4. Allegation of collecting money from clients without paying service tax.
5. Presentation of invoices and service tax credit taken by the service receiver.
6. Delay in payment of dues by the appellant and operating without registration.
7. Apparent intention to evade service tax leading to dismissal of the appeal.

Analysis:

1. The appellant, engaged in providing manpower supply services, faced a confirmed demand for service tax and penalties under Sections 76, 77 & 78 of the Finance Act, leading to an appeal before the Tribunal.

2. The appellant's counsel argued against willful default in payment, highlighting timely tax payments made upon receipt from clients. Ignorance regarding service tax registration initially was mentioned, with subsequent registration in 2008. The appellant's lack of awareness of legal provisions was emphasized.

3. The appellant was accused of collecting significant amounts from clients without paying service tax, despite taking registration only in 2008. The appellant's counsel submitted a detailed chart showing the periodwise service tax payable and paid.

4. Invoices and purchase orders revealed the inclusion of service tax, with the appellant eventually taking service tax credit after significant delays. The appellant was noted to have operated for an extended period without obtaining registration, raising questions about compliance.

5. The appellant's counsel argued that delayed credit taken by the service receiver was due to the client's delayed payments, attempting to justify the appellant's actions.

6. The Tribunal observed the delays in payment by the appellant, ranging up to 36 months, and noted the service receiver availing credit despite the delays. The appellant's extended operation without registration was highlighted.

7. Considering the circumstances, the Tribunal found an apparent intention to evade service tax, especially evident from the delayed registration obtained only after Central Excise Officers' visit, leading to the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues, arguments presented, evidence considered, and the ultimate decision reached by the Tribunal based on the facts and legal provisions involved in the case.

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