2017 (12) TMI 717 - AT - Service Tax

Non-payment of service tax - tax collected but not deposited - penalty - Held that - appellant has collected the service tax but did not deposit the same. Therefore, he is liable to pay the penalties under various provisions of the Finance Act, 1994 - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against rejection of appeal and confirmation of Order-in-Original by Commissioner.

Analysis:
The appellant, engaged in TV program production services, faced allegations of collecting service tax but not remitting it to the government exchequer, leading to demands for two periods. The appellant contended financial difficulties, timely partial payment, and disputed Income Tax refunds causing delays. The appellant paid a substantial sum before the show-cause notice. The appellant argued for leniency on penalties under Sections 76, 77, and 78.

The respondent argued that despite receiving service tax from recipients, the appellant failed to deposit it, indicating an intention to withhold government dues. The Commissioner found the appellant's financial constraints insufficient justification for delayed payments, emphasizing the lack of proof or legal basis for the appellant's claims. The Commissioner upheld the penalties imposed, citing the detection of service tax evasion due to departmental action.

Upon review, the Tribunal found no flaws in the Commissioner's well-reasoned order. The Tribunal affirmed that the appellant's collection of service tax without remittance rendered them liable for penalties under the Finance Act, 1994. Consequently, the Tribunal dismissed both appeals, upholding the Order-in-Original and penalties imposed.

The judgment, delivered by S.S GARG, concluded by pronouncing the operative part of the order in open court on 06/11/2017.