2018 (1) TMI 267 - AT - Service Tax

Short payment of service tax - Manpower Supply services - Held that - We do not find any evidence in the form of contract or purchase order - the demand has been correctly made against the Appellant. Penalty - the Appellant were paying a meager amount towards service tax and in between November 06 to Aug 08 no amount was paid by them. They also did not file any ST - 3 Return and it was only detection by the department that they discharged the service tax liability - penalty upheld. The Appellant is eligible for 75% waiver of the penalty imposed under Section 78, rest of the demand and penalty confirmed against the Appellant is upheld. Appeal disposed off.

Summary

Issues:
Appellant's liability for short paid service tax, non-filing of ST-3 returns, waiver from penalty, inclusion of job work value in services, correctness of penalty imposition.

Analysis:
The appellant, engaged in providing Manpower supply services, faced a show cause notice for short paid service tax and non-filing of ST-3 returns amounting to ?36,25,407 for the period 16.06.2005 to 31.03.2009. The adjudicating authority confirmed the demand, leading to an appeal. The appellant argued financial difficulties prevented tax payment, citing a deposit of ?28,77,250 with interest before the notice and further payment. They claimed non-payment wasn't intentional tax evasion, referencing a tribunal case and disputed the inclusion of job work value in taxable services, seeking penalty waiver. The Revenue upheld the impugned order's findings.

Upon review, the Tribunal noted the appellant's registration under service tax for Manpower Supply services but found short payment and non-filing of returns during 2005-2009. The adjudication order confirmed the service tax and penalties, with full payment by 29.12.2011. The Tribunal rejected the job work exemption claim due to lack of evidence and upheld the demand. Regarding penalties, the Tribunal observed the appellant's irregular tax payments and non-filing of returns until departmental detection, justifying penalty imposition. However, due to prompt payment post Order-in-Original, 75% of the penalty was waived.

Consequently, the appeal was rejected concerning penalty imposition under sections 76 and 78. The appellant received a 75% waiver on the penalty under Section 78, while the remaining demand and penalty were upheld. The judgment was pronounced on 10/11/2017.