M/s. Universal Aviation Services (P) Ltd. Versus Commissioner of GST & Central Excise Chennai
Service Tax
2018 (11) TMI 1149 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 12-9-2018
Appeal Nos. ST/555/2011 and ST/68 & 69/2012 – Final Order Nos. 42409-42411/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri G. Natarajan, Advocate for the Appellant
Shri K. Veerabhadra Reddy, ADC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants are engaged in providing manpower supply service, security service and cleaning service mainly to the airlines industry. During the course of audit of accounts, it was noticed that during the period April 2008 to September 2010, the appellant had collected service tax but had not remitted the same to the Government Account. It was also noticed that they had delayed the payment of service tax for earlier period from October 2007 to March 2008.
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s unable to pay the service tax. They could not afford to delay the payment of wages to the 5000 labourers employed for baggage handling, ticketing, ground support, driving etc. In order to sustain the business, the appellant had to give priority to such payments. Moreover, the appellant could not retrench their employees also as they have to continue to supply the manpower to airlines. As and when any amounts were received by the appellant from the airlines, albeit with service tax, the amounts were used by the appellant to pay salary to its employees as otherwise the entire business would go to standstill. The failure to pay service tax was only due to giving priority to such payments in order to avoid closure of business. The appellant had also requested the department to recover their dues from M/s. Indian Airlines and M/s. Kingfisher Airlines who owes major sums to the appellant. Thus, he explained that the non-payment of service tax was only due to such delayed receipt of amounts
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f service tax was due to non-receipt of the dues from the airlines and also due to the delayed receipt of amounts. It is seen from the records that their clients include M/s. Indian Airlines and M/s. Kingfisher Airlines. The appellant in their reply to the show cause notice has stated that they were undergoing much financial crisis due to non-receipt of the amounts from airlines. The said ground of non-payment of service tax due to financial difficulties has been discussed in detail by the Tribunal in the case of M/s. Dusters Total Solutions Pvt. Ltd. (supra) wherein the Tribunal had set aside the penalty imposed under Section 76 of the Finance Act invoking section 80 of the said Act. Similarly, in the case of M/s. Q Source Global consulting Pvt. Ltd. vide reported in 2018 (8) TMI 423, the penalty imposed under section 78 was set aside on the ground that the appellant has put forward reasonable cause for non-payment of service, which was due to financial hardship. In the present case,
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