2017 (6) TMI 162 - AT - Service Tax

Non-payment of service tax - The appellant had collected an amount of ₹ 4,60,000/- along with service tax of ₹ 56,304/- but did not deposit the service tax to the Govt exchequer - demand - Held that - the appellant has collected the service tax but did not deposit the same in the Govt Treasury which itself shows that there was malafide intention to evade payment of service tax. The appellant was registered with the Service Tax Department and was very well aware of their liability to pay service tax to the Govt. The appellant has not been able to give any reasonable explanation as to why the service tax was not deposited in the Govt Treasury - appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against rejection of appeal by Commissioner (Appeals) and confirmation of order-in-original regarding service tax liability.

Analysis:
1. Background: The appellant, engaged in providing taxable services as a "Programme Producer," was found to have not discharged the service tax liability related to services provided to a specific entity, despite collecting the tax amount from the client. The original authority confirmed the demand, imposed penalties under relevant sections of the Finance Act 1994, and appropriated the service tax collected by the appellant.

2. Appellant's Argument: The appellant contended that they had paid the service tax along with interest, highlighting the absence of any malicious intent to evade tax. The appellant also challenged the issuance of the show-cause notice since the tax had been paid with interest.

3. Respondent's Argument: The respondent defended the imposition of penalties, emphasizing the appellant's failure to remit the collected service tax, indicating an intention to evade duty. The respondent argued against any reasonable cause for the appellant to be exempted under Section 80 of the Finance Act.

4. Legal Precedents: Both parties cited various legal precedents to support their arguments, showcasing contrasting decisions on similar matters from different tribunals.

5. Judgment: After considering the arguments, material presented, and legal precedents, the judicial member upheld the impugned order. The decision was based on the appellant's failure to deposit the collected service tax despite being aware of their obligations, indicating a deliberate intention to evade payment. The lack of a reasonable explanation for not remitting the tax to the government treasury further supported the decision to dismiss the appellant's appeal.

6. Conclusion: The judgment, delivered on 20/04/2017, affirmed the Commissioner's decision, emphasizing the appellant's failure to fulfill their tax obligations despite collecting the tax amount from the client. The ruling highlighted the importance of complying with tax regulations and the consequences of non-compliance, leading to the dismissal of the appellant's appeal.