M/s. A.M.S. ENTERPRISES Versus COMMISSIONER OF CENTRAL SERVICE TAX, CHENNAI [PRESENTLY KNOWN AS “THE COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE”]
Service Tax
2018 (11) TMI 1221 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 5-9-2018
ST/MISC/4111/2017 and ST/561/2011 – FINAL ORDER NO. 42344/2018
Service Tax
Smt. Sulekha Beevi C.S, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
For the Appellant Shri J. Shankar Raman, Adv.
For the Respondent Ms. T. Usha Devi, DC (AR)
ORDER
Per Bench:
The appellants are a partnership concern engaged in the business of Man-power Supply Service to various corporate customers. On gathering intelligence, that they are evading payment of service tax, the officers of DGCEI, took up investigation. On verification of records, it was noticed that the appellants collected service tax on Man-power Supply Service but failed to remit the same to Government account. Accordingly, show-cause
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alleging suppression of facts with intent to evade payment of tax for the period from 16.06.2005 to 31.03.2008. Further that the appellants were under confusion as to whether the amount of salary, ESI, PF etc., to be paid to the workers are subject to levy of service tax. On belief, that the demand raised including these amounts in the total taxable value is not subject to levy of tax, the appellants had contested the demand. They had also contested the demand on limitation before the authorities below. However, the Commissioner confirmed the demand and imposed equal penalty under section 78 of the Finance Act, 1994. Since there was a letter received by appellants to the DGCEI officials on 15.09.2006 submitting the necessary documents, the appellant's activity was well within the knowledge of the officials at least from 15.09.2006 onwards. Hence, during the period from 15.09.2006 to 31.03.2008 the extended period cannot be invoked. To support this contention, he placed reliance on
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axes from their client etc. The details along with such letter pertain to earlier period i.e., 2003-04 and 2004-05. For the subsequent period, the appellants have not filed periodical returns. The appellants have filed details of charges collected on 29.07.2008 and 06.11.2008. They requested for further time vide letter date 17.02.2009. The said letter having been given to DGCEI during the investigation proceedings, it cannot be said that the department was put to knowledge and, therefore, there is no suppression on the part of appellants. The extended period invoked as well as penalty imposed are correct and proper.
4. Heard both sides.
5. The learned counsel has contested only on the ground of limitation and the penalties imposed. To support the ground of limitation, he has relied upon the letter dated 15.09.2006 issued by the appellants to DGCEI. The said letter is seen at page 143 of appeal paper book. On perusal of the said letter, it is very much clear that the appellants have
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endered by them under Man-power Supply service, the invocation of extended period after 15.09.2006 cannot sustain. In identical set of facts, the Hon'ble Jurisdictional High Court in the case of M/s. V.N.K. Menon & Co., Vs CESTAT, Chennai reported in 2015 (323) E.L.T.524 (Mad.) has upheld the decision of Tribunal which set aside the demand after the date when department came to know about the details. The relevant portion is reproduced as under:
“8. On a careful consideration of the entire gamut of facts, the answer to the question of law raised by the assessee is found in Para-2 of the order of the Tribunal itself. It has been held by the Tribunal that there is a clear case of suppression for invocation of extended period of limitation for the period prior to August, 1996, as the activities of the appellant/assessee came to light subsequent to an investigation by the Department. However, insofar as the period post August, 1996, on the plea of suppression, the Tribunal was correct
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warranting interference with the well considered finding of the Tribunal.”
6. From the above discussions, we are of the considered opinion that the demand for the period 15.09.2006 to 31.03.2008 cannot sustain and requires to be set aside, which we hereby do. The appeal partly succeeds on the ground of limitation. However, we find that the ingredients of suppression are very much present prior to 15.09.2006. Only pursuant to the investigation conducted not only with appellants but also with many of their clients like M/s. SPIC, M/s. Raddison GRT, M/s. Aircel, etc., did the fact of collection of service tax and the evasion come to light. Discernible, these facts were suppressed from the Department till the investigation. This being so, not only is the extended period invocable up to 15.09.2006 and demand in Annexure-A of the notice sustainable with interest up to that date but the penalty equal to the amount of such revised tax liability is also imposable. No interference is also calle
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