The Mumbai Regional Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 77 is sustained when the assessee failed to register and to file ST-3 returns within the prescribed time.
M/s. Om Sai Fabricators, the appellant order in original No 51/AT(S-1)/COMMR/RGD/12-13 dated 16.11.2012 of the Commissioner Central Excise Raigad which confirms service tax of Rs.1,25,36,776.00 (Rupees one crore twenty-five lakh thirty-six thousand seven hundred seventy-six only) as payable by Shri Sukhdeo Vasudeo Yadav, the Proprietor of M/s Om Sai Fabricators during the period 2006-07 to 2008-09 under section 73(2) of the Finance Act, 1994.
Based on intelligence, the noticee was charging and collecting service tax from their clients on the taxable service provided but not depositing the same with the Government exchequer. It was noticed that the noticee charged service tax separately in a few of the invoices whereas in other cases no service tax was shown separately; that they have obtained service tax registration but not followed the proper procedure; that being a sub-contractor.
It was evident from the facts of the case that the appellant is merely providing the taxable services simplicitor without any element of transfer of the material along with the service. The Appellant concealed the correct taxable amount with the service tax department until the Departmental officers initiated an inquiry in this regard. Thus it was observed that the extended period, as provided for under the proviso to sub-section (1) of section 73 ibid for recovery of such service tax not paid and/or short paid by the Appellant has been correctly invoked by the revenue authorities.
In Dharamendra Textile, it was observed that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A.
A Coram of Mr Sanjiv Srivastava, member (technical)and Dr Suvendu Kumar Pati, member (judicial)held that the appellant had not taken registration and had not filed ST-3 returns within the prescribed time, then the penalty imposed under Section 77 is justified.
The Tribunal upheld the demand for service tax and demand for interest. Shri Neerav R. Mainkar, Advocate appeared for the Appellant and Shri Anand Kumar, Additional Commissioner appeared for the Respondent.
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