M/S Cms Computers Ltd vs Commissioner Of Service Tax

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. I

APPEAL No.ST/363/11-Mum

(Arising out of Order-in-Original No. 44/STC/BR/10-11 dated 25.02.2011 passed by Commissioner of Service Tax, Mumbai)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

================================================ M/s CMS Computers Ltd. Appellant Vs. Commissioner of Service Tax, Respondent Mumbai

Appearance: Ms. Aparna Hirandagi, Advocate for Appellant Shri A.K. Goswani, Addl. Commr (AR), for Respondent

CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing : 06/08/2015 Date of Decision : -------------

ORDER NO.

Per: M.V. Ravindran

This appeal is directed against Order-in-Original No. 44/STC/BR/10-11 dated 25.02.2011.

2. The relevant facts that arises for consideration, in short, the appellant herein had registration as service provider. An investigation was carried out and it was noticed that the appellant had not discharged the service tax liabilities in respect of the services rendered by them on (i) Manpower Supply (ii) Business Support Service (iii) Renting of Immovable Property Service (iv) Commercial Training & Coaching (v) Franchisee Service (vi) Management, Maintenance & Repair Service (vii) Erection, Commissioning & Installation Service and (viii) Business Auxiliary Service. Show cause notice was issued for demand of service tax, interest thereof and for imposition of penalties. The appellant contested the show cause notice on merits and also on limitation. The adjudicating authority did not agree with contention raised by the appellant and after following due process of law, confirmed the demand with interest and imposed penalty under section 78 of the Finance Act 1994.

3. Learned Counsel appearing on behalf of the appellant would take us through the entire case records. She would submit that the appellant has already paid the service tax liability and the interest thereof. It is her submission that the services for which the tax has been confirmed improperly, as the demands in the case of Manpower Supply is in respect of reimbursement of the employees deputed by them to their associates concerns and the reimbursements involved actual cost and that they are not a commercial concern; tax liability under Business Support Service is incorrect as they had undertaken printing of bills in the premises of their customers by deploying their own printer and personnel. On an identical issue, DGCEI had issued a show cause notice hence question of invoking extended period of limitation does not arise; the reimbursement of actual corporate expenses recovered from their sister concern is also incorrect as it is not a case of providing any infrastructure or Business Support Services; and as to demand of service tax liability on commercial coaching classes, it is her submission that service tax is not liable on the fees collected from students for providing coaching to their own training institutes and fees collected for online exams and training imparted to corporate clients. It is her submission that appellant has discharged the entire service tax liability and interest thereof hence a lenient view may be taken by setting aside the penalties imposed by the adjudicating authority. She would submit that the provision of section 80 can be invoked in this case as appellant had bonafide belief of non-taxability of the services rendered by them.

4. Learned departmental representative would submit that the tax liability would have escaped had the department not undertaken a detailed investigation. It is his submission that the appellant being a unit registered with the service tax authorities should have, in case of doubt, approached the departmental authorities and got their doubts clarified before holding a belief that no tax is payable by them.

5. We have considered the submissions made at length by both sides and perused the records.

6. It is noticed from the records that appellant is not contesting the service tax liability and the interest thereof on the ground that having paid the same before issuance of the show-cause notice and after issuance of the show-cause notice and their Grounds of Appeal are directed only towards contesting the penalties imposed by the adjudicating authority.

6.1 On perusal of the records, we find that the appellant had mis-declared the taxable receipts in respect of the transactions which were declared by them to the authorities while filing ST-3 returns, is not disputed. This act itself indicates that the appellant had ulterior motive in suppressing and mis-declaring the taxable transactions. The argument by the learned Counsel before us that the services rendered by them are not taxable is also mis-directed in as much it is on record that the services rendered by them are taxable under some category or others but the appellant despite receiving an amount for the said services, mis-declared the amount to the authorities in order to discharge less service tax which itself is suppression and mis-statement of the tax liability to the authorities. This conduct of the appellant is unbecoming of an assessee who supposed to comply with the provisions of law and more so in this case as the appellant was a registered unit with the authorities.

6.2 Keeping in view of the foregoing, we hold that the impugned order which imposes penalty under Section 78 is correct and does not require any interference.

7. Appeal is disposed of by upholding the tax liability and the interest thereof as also the penalties imposed on the appellant.

(Order pronounced in Court on__________)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

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1 5 APPEAL No.ST/363/11-Mum