VINITHA NAMBIAR Vs. COMMISSIONER OF SERVICE TAX, BANGALORE

JUDGEMENT

(1.) THIS matter arises before the Tribunal for the second time. The appellant is a proprietary concern engaged in provision of Manpower Recruitment Agency service. The appellant was registered with the department in the year 2001. During the period 2001 to 2005, the assessee did not remit the service tax nor followed other statutory formalities including filing of ST3 returns. Detecting irregularities, authorities issued a show cause notice on 19 -7 -2004. After due process of law, the original authority confirmed the demand of service tax and imposed penalties under Sections 76, 77 & 78 of the Finance Act, 1994 (the Act). He did not quantify the service tax as well as the interest. Deciding the appeal filed before the Commissioner (Appeals), he sustained the order of the original authority as regards the service tax and interest and vacated the penalties ordered. The department filed an appeal against the order of the Commissioner (Appeals). The assessee did not file any appeal or cross objection. The Tribunal disposed the appeal filed by the Revenue with the following findings :

(2.) VIDE the impugned order, the Commissioner (Appeals) found that during the material period, the assessee was engaged in rendering Manpower Recruitment Agency service. It had correctly accounted the tax collected from its customers. However, it had not paid the tax due to the Government, but paid the same when the proceedings were initiated against the assessee. The fact that the assessee had collected the tax and retained the same until confirmation of the demand from the original authority established that the assessee had intentionally evaded the tax due and suppressed the relevant information by the act of non -filing of ST3 returns. The assessee argued that the show cause notice issued had not quantified the tax due and proposed to be recovered as required under the statutory provisions. However, on receipt of the notice, the assessee computed the tax and paid the same. The assessee was a proprietary concern and a lady. She submitted that she was under mental strain due to litigation for divorce from her spouse during the period. She had to attend her ailing father who was suffering from terminal cancer and eventually succumbed to it. It is submitted that on account of the mental strain and pressure, the tax due could not be paid in time and returns could not be filed. It is submitted that the penalty equal to twice to the tax demanded imposed under Section 78 and that equal to the tax imposed under Section 76 of the Act are extremely harsh. It is prayed that the penalties may be waived. It is further submitted that the Commissioner had wrongly rendered the finding that the appellant had recovered tax from their clients and retained the same, when the department initiated the proceedings, the appellant had worked out the tax due and promptly paid the same. Therefore the basis of the Commissioners finding that the assessee had intentionally evaded tax is incorrect.

(3.) THE learned JDR submits that the assessee had registered with the department as provider of service in 2001 and regularly rendered the service without following the statutory formalities including payment of tax due. The Commissioner has rightly concluded that the assessee had intentionally evaded the service tax.