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TMI Blog2023 (4) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... required to under service tax law, collected service tax of Rs. 15 lakhs from its clients and had not deposited it in the Government exchequer, had not provided the details of the services provided by him, claimed that the invoices were destroyed and that he had no balance sheet or ledger, the Superintendent did what could best be done based on the available information- viz., the Form 26AS provided by the appellant and the Forms 16A provided by the clients of the appellant. The appellant cannot now cry foul and claim that the department failed to classify the service. The second contention of the appellant is that some of the services rendered were in the nature of Works Contract Service and its claim for classification under Works Contract Service was rejected - It is found that this plea was taken by the appellant in respect of some contracts before the adjudicating authority. However, the adjudicating authority did not agree with this contention holding that unless VAT was paid on the goods which were transferred, it will not amount to Works Contract Service. There is no actual sale of goods but there is deemed sale of the goods which have been used while rendering the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered with the Service Tax department. Intelligence gathered by the department indicated that while the appellant had obtained registration only on 23rd April 2010, it had been providing taxable services much before. It was found that the appellant was not filing the ST-3 Returns also. The jurisdictional superintendent sent a letter dated 21.09.2012 requesting the appellant to file the ST-3 return but the appellant did not respond. A reminder was sent on 6.8.2013 and then a summons dated 20.11.2013 was issued by the superintendent to the appellant. Shri Rao, the proprietor, appeared and gave a statement on 15.5.2014 in which he stated that they have been providing repair and maintenance service since 2009 and have also been providing manpower for repair and maintenance. He also confirmed that they collected over Rs. 15 lakhs as service tax from the clients and had not deposited this amount with the Government. He claimed that he was ignorant of service tax rules and when he realized his mistake, he wanted to deposit the amount but could not do so because his family met with an accident and was hospitalized and that he will pay be service tax within four months. He also said tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thirty seven lakhs eighty eight thousand eight hundred ninety only) [Service Tax of Rs. 36,78,534/-, Education Cess of Rs. 73,571/- and SHE Cess of Rs. 36,785/- on Management, Maintenance Repair Service and order for its recovery from the Noticee under proviso to Section 73 (1) of the Finance Act, 1994. The service tax amounting to Rs. 5,40,000/- already paid by the Noticee is ordered to be appropriated against the demand of service tax confirmed. (ii) I order recovery of interest at appropriate rate from the Noticee on amount of Rs. 37,88,890/- not paid/late paid under Section 75 of the Finance Act, 1994, (iii) I impose a penalty of Rs. 10,000/- under Section 77 (2) of the Finance Act, 1994 for failure to file the ST-3 Returns. (iv) I impose a penalty of Rs. 37,88,890/- under Section 78 of the Finance Act 1994 for suppressing the value of taxable services provided by them with intent to evade the payment of service tax. (v) I impose a late fee of amount not exceeding Rs. 20,000/- for failure to file each of the Statutory ST-3 Return for the period 2009-2010 to 2013-2014 under Section 70 of the Finance Act, 1994 read with rule 7 of the Service Tax Rules 1994 (vi) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rao) and had not even obtained the registration during the period. The appellant claimed that he was not aware of the service tax provisions. Nevertheless, according to his own statement he collected about Rs. 15 lakhs and had not deposited in the exchequer. He did not file the ST-3 returns as well. After sending a letter and a reminder, the jurisdictional Superintendent issued summons to record his statements. In the statements, he admitted that he had collected amounts as Service tax and not deposited them in the Government exchequer. In his second statement, he said that he had deposited part of the amount which he had collected in the Government account. Ignorance of law is not an excuse and the appellant seems to be selectively ignorant of law. He collected service tax from the clients but was ignorant that it had to be deposited with the Government and that he had to file ST-3 Returns. If he was ignorant, he should have at least filed the returns after receiving a letter from the superintendent. He did not and waited until he was compelled by summons to appear. When the appellant was asked for details of his business activity, he said that he did not have any ledger or balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Even if the appellant was not required to pay service tax on any service which it rendered, if it had collected any amount as representing service tax, it was duty bound to have deposited it in the Government exchequer as per section 73 A which reads as follows. SECTION 73A. Service tax collected from any person to be deposited with Central Government. (1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub- section (1) or sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is involved, VAT/Sales tax is not payable), the service will go under respective heads of taxable service. 17.11 I construe from the copy of the Commercial invoices issued by the notice to M/s. SAIL, BSP that there is no evidence to show that the transfer of property in good were involved in the execution of the contract. Further, VAT/Sales tax element is also absent in the invoices, which statutorily categorise the services renderd by the Noticee under respective heads of taxable services as standalone services. As such these services cannot be accommodated under Composite Work Contract Service . (emphasis supplied) 13. The lower authorities have erred in holding that to qualify as the Works Contract Service, VAT or Sales tax must have been paid and even if some material is involved, if no VAT is payable, the contract will not be a Works Contract Service. There are (a) contracts for supply of goods; (b) contracts for providing services; and (c) contracts which involve both, i.e., provide services along with the goods required to provide such services. The third category of contracts are a separate species of contracts known to trade and are called Works Contract Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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