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TMI Blog2015 (8) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... s been registered as 'SA (ST) 21/2015' Brief facts of the case as per SCN 1.1 M/s. CLR Services Pvt. Ltd. having their corporate office at B-2, 2nd Floor, Minar Appartment, CST No.124/1, Plot No.-83. Low College Road, Erandwane, Pune 411 004 were engaged in the providing services such as facility management House Keeping, Contract Staffing and HR Solution, etc. at various locations all over India. For Services rendered from their Pune office they obtained Service Tax Registration No.AABCC8210GST001 under the category of "Cleaning Activity Service" from Central Excise Pune-III Commissionerate for their premises located at B-2, 2nd Floor, Minar Apartment, CST No.124/1, Plot No.-83, Low College Road, Erandwane, Pune - 411 001 falling under Central Excise and Service Tax, Pune-III Commissionerate. 1.2 An intelligence was collected by the officers of DGCEI, Regional Unit, Pune that M/s. CLR Services have suppressed their taxable value with the department and service tax was discharged on the understated value which was charged and collected from their customers. M/s. CLR Services Pvt. Ltd. have five locations of its operation; (i) Pune its corporate office, (ii) Branch office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued on centralized software server based in Pune for all the branch officers. The manpower rate contract bills contain the following elements - manpower rate, equipment supply and consumable/ material supply. The service tax had been charged from the clients on the manpower portion such bills and no service tax was on the remaining portion i.e. supply of equipments and materials. In respect of rate/ sq. feet contracts they had raised/ issued running bills on monthly basis. 1.5 During the investigation it is observed that M/s. CLR had also provided services to the SEZ clients, viz. M/s. Satyam Computers Services Ltd., M/s. Divyasree NSL, Infrastructure Pvt. Ltd. M/s. Cushman & Wakefield PMSL, M/s. Shyamaraju & Co. India Pvt. Ltd. and M/s. Logicon Engineering (DFL) at their various locations at Hyderabad, Bangalore, Pune and Mumbai. Being SEZ unit having exemption to pay service tax, M/s. CLR had not charged and had not collected service tax from these units in the bills. The investigation is conducted to the effect that the SEZ clients to whom M/s. CLR had provided cleaning services are covered under the list of SEZ notified by the Government. 1.6 On analysis of the above docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Service tax registration for their Mumbai branch office was taken in January, 2011 for Bangalore branch office was taken in December, 2010 and for their Delhi branch officer registration was taken in January 2011, however no service tax registration have been taken for their branch offices at Hyderabad. From the above it is noticed that the service tax registration for their branch offices outside Pune was taken during the financial year 2010-11. 1.10 From the nature of the services provided as discussed above, it appears that M/s. CLR had provided taxable service falling under the category of "Cleaning Activity Services" as defined under Section 65(24b) of the Finance Act, 1994 to their clients. They also appear to have charged and collected service tax from them, also received payments but did not deposit with the Govt. Exchequer. 1.11 M/s. CLR vide their letter dated 3-10-2013 informed about the service tax payment made by them and disclosed in their S.T. - 3 returns in respect of their Pune office. They also informed that in case of other branches no service tax payment was made. This amount of Rs. 2,75,70,547/- was paid by them before DGCEI Pune initiated investigations a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligatory on their part to deposit the same to the Government account Though, applicant filed the S.T.-3 return for the period 2008-09 to 2011-12 with the jurisdictional service tax authorities, the value declared in the returns were suppressed and understating the value than the actual amount billed and collected in the relevant period. The service tax amount was also collected at appropriate rate from their clients, however the applicant had not deposited the same to the Government account with an intention to evade payment of service tax. This has clearly been admitted by Shri Gaurav R. Pathak, Director of I the applicant in his statements dated 31-8-2012, 4-9-2012 and 4-10-2013. Thus, the applicant appears to have suppressed the facts of providing services to their clients and collection of service tax from them. It also appears that the applicant have willfully suppressed the facts of non-payment of service tax despite having collected the same from their clients, which they were duty bound to deposit with the Central Government. Therefore, proviso to sub-section (1) of Section 73 of the Finance Act, 1994, which provides for issuance of SCN within the relevant date appears i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax by reasons of suppression of facts from the department and contravention of the provisions of Chapter V of the Finance Act, 1994 and the rules made thereunder, with intent to evade payment of Service Tax; (f) Penalty should not be imposed upon them under Section 76 of Chapter V of the Finance Act, 1994 for contravention of the provisions of Section 68 of the Act, ibid read with Rule 6 of the Service Tax Rules 1994. (h) Penalty should not be imposed upon them under Section 77 of Chapter V of the Finance Act, 1994 ibid for contravention of the provisions of Section 70 of the Chapter V of the Finance Act, 1994 ibid read with Rules 5 and 7 of the Service Tax Rules, 1994. Disclosure of the applicant 2.1 In their application filed before the Settlement Commission, the applicant submits that due to severe financial crisis they could not pay the service tax collected by them from their clients. It is submitted that the applicant has incurred substantial losses and its net worth has been eroded. 2.2 The applicant submits that non-payment of service tax was purely due to financial crises faced by the applicant. 2.3 It is submitted that the applicant had no intention to evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 2.11 By the instant Application for Settlement under Section 32E of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, the applicant herein, in true spirit of settlement, seeks to settle the entire case at once forever by admitting the entire service tax as demanded in the SCN. 2.12 The applicant submits that the co-operation extended by the applicant may please be taken into account while considering the grant of immunities. 2.13 The application submits that Section 80 of the Finance Act, 1994 applies in the fact of the present case. The alleged non-payment is bona fide. There was reasonable cause for alleged failure to pay the service tax. The applicant may be granted complete waiver from the penalties proposed under Sections 76, 77 and of the Finance Act, 1994 in terms of Section 80 of the Finance Act, 1994. 2.14 The applicant in true spirit of settlement of the entire case is voluntarily filing the instant Application for settlement, at once, of all the issues raised in the SCN. 2.15 The applicant craves leave to add, alter or amend the above averments in case the need arises and undertake to extend full co-operation in settlement proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r client and deposit it to the Government exchequer. Failure on the part of service provider cannot be borne by the Government. Moreover when the party approaches for settlement, before filing of the application, the applicable service tax along with interest must be discharged by the applicant. In view of the above it appears that the application before the Settlement Commission becomes irrelevant under the facts and circumstances of the present case. 4.4 As regards the payment of interest, M/s. CLR have not submitted the working of interest calculation with the application and had deposited only an amount of Rs. 20,00,000/- as interest. On examining the due date of Service Tax liability of Rs. 4,36,10,091/- and the actual payment date, it appears that the interest amount of Rs. 20,00,000/- paid by M/s. CLR is far less than the actual interest liability due on the applicant. Therefore it is requested to the Settlement Commission, that direction may be given to the applicant to file the interest calculation sheet and pay accordingly. Thus, it appears that the application before the Settlement Commission becomes irrelevant under the above facts of the present case. 4.5 The applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the applicant was providing Facility Management, House Keeping, Contract staffing and HR Solution, etc. through various locations all over India. They have units in Pune, Bangalore, Delhi, Mumbai and Hyderabad. The present proceedings are in respect of their Pune unit. The demand is on two counts namely; (i) Rs. 4,36,10,091/- relating to non-payment of service tax on the above services for the period April, 2008 to December, 2012. This has been paid in full by the applicant along with interest of Rs. 1,08,00,000/-. An amount of Rs. 88 lacs was paid over a period of from February to August, 2015, details of which has been provided in their letter dated 24-8-2015. (ii) Rs. 2,47,513/- relating to the demand in respect of service provided to SEZ units during the period 3rd March 2009 to 19th June, 2009. During this period exemption was available to services provided within the SEZ by way of refund. In other words, service tax had to be paid initially and refund of the said amount to be claimed. In this connection the Id. Advocate relied on the decision of CESTAT, Allahabad in the case of M/s. Reliance Ports & Terminals Ltd. v Commissioner of Central, Excise & Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to their Pune, Bangalore, Delhi and Mumbai Units simultaneously. 7.4 They had not been able to file settlement applications for all the Units simultaneously as they were not in a position to pay the entire Service tax demand along with interest. They were now proposing to file settlement applications before the Chennai Bench on the same matter relating to the Bangalore Unit. 7.5 Further, the present application has already been allowed to be proceeded with vide Order dated 13-2-2015. Findings 8.1 The Bench has examined the facts of the case, the submissions made by the applicants in their application as well as at the time of personal hearing as also the submissions of the Revenue. 8.2 This is a case where the applicants have been alleged to have evaded Service Tax on a number of services provided by them through their Units located all over India. Their units are located in Pune, Bangalore, Delhi and Mumbai and Hyderabad. 8.3 Before proceeding with the merits of the case, it is necessary to first to decide as to whether the present application itself is admissible or not. It is observed that against Sl. No.11 of their application in form S.C.(S.T.-1), which requires the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y if the present application was in relation to any matter other than the matter covered in the earlier two settlement orders. The Bench is of the view that this argument is specious. The word "matter" has not been defined in the Act and as such it has to be given its normal meaning. As commonly understood the "matter" would relate to proceedings under any other SCN. When 4 SCNs have been issued to the four Units of the applicant, they will all be considered as different "matters". Any other interpretation of the word 'matter" would lead to anomalous situations. Who would decide whether two SCNs relate to the same 'matter' or not? Would introduction of any new fact in a particular SCN make it a different 'matter'? Can 2 SCNs relating to two different periods relate to the same 'matter'? etc. 8.6 The Settlement Commission is empowered to decide a 'case' as per Section 32E read with the definition of a "case" as per Section 31(c) of the Central Excise Act, 1944. Two separate applications filed by an applicant are to be dealt with separately and independently. Each Show Cause Notice is a 'case'. Two SCNs, and accordingly two applications, cannot be combine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lized for concealment of tax particulars in an earlier proceedings, they become ineligible to file any application before the Settlement Commission in future. 8.10 Even otherwise, it is seen that in the present application the taxability of services provided to units in the SEZ is an 'issue whereas it was not an issue' in the earlier 2 applications already settled by the Mumbai and Delhi Benches of the Settlement Commission. 8.11 In the present case they have been penalized by the Settlement Commission Benches of Mumbai and Delhi in their Final Orders dated 25-8-2014 and 22-7-2014, respectively, and since the present application, relating to the Pune Unit, has been filed on 19-1-2015, the same is clearly not admissible under Section 32-O(1)(i) of the Central Excise Act, 1944, as made applicable to Service Tax. 8.12 Keeping the above aspects in mind, the Bench passes the following order. ORDER 9. The Settlement application filed by the applicant, M/s. CLR Services Pvt. Ltd. in respect of their Pune Unit is rejected as inadmissible under Section 32-O(1)(i) of the Central Excise Act, 1944 as made applicable to Service Tax by virtue of Section 83 of the Finance Act, 1994.< ..... X X X X Extracts X X X X X X X X Extracts X X X X
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