CESTAT upholds Service Tax Penalty on ATC Logistics for Non-Filing of ST-3 Returns, Holds Willful Suppression Established [Read Order]
The non-filing came outside only after the departmental investigation. Therefore, it held that the revenue invoking demand including penalty is proper and justified.
The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Kolkata has upheld the penalty under Section 78 of the Finance Act, 1994 imposed on ATC Logistics Pvt. Ltd., holding that the revenue established the wilful suppression.
ATC Logistics, the appellant engaged in providing taxable services such as Cargo Handling Service, GTA (Goods Transport Agency) service, and renting of Immovable Property service.
The department, acting on intelligence inputs regarding service tax evasion, initiated an inquiry by issuing summons in June 2015.
During investigation, the Director of the company appeared and gave a statement admitting service tax liability, following which the assessee deposited some amounts through GAR-7 challans.
A show cause notice dated 14.10.2015 issued as the the assessee had neither discharged the service tax liability nor filed returns for the period under dispute.
Even though the assessee had paid part of the tax before issuance of the show cause notice and the balance later, this did not erase the nature of default, said the bench of Ashok Jindal ( Judicial Member) and K.Anpazhakan (Technical Member).
The Tribunal further added that the assessee was already registered under service tax and had initially filed returns and paid tax, but during the impugned period it stopped paying tax and also stopped filing ST-3 returns.
According to the tribunal, this non-filing clearly established the mala fide intention to evade tax. The non-filing came outside only after the departmental investigation. Therefore, it held that the revenue invoking demand including penalty is proper and justified.
Therefore, it refused to quash the penalty. The appeal of ATS logistics was dismissed accordingly.
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