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Central Investigation and Security Services Ltd V/S C.S.T., Chennai-II


Company & Directors' Information:- CENTRAL INVESTIGATION AND SECURITY SERVICES LIMITED [Active] CIN = U74920MH1985PLC035790

Company & Directors' Information:- SECURITY CO LTD [Active] CIN = L65929WB1948PLC016992

Company & Directors' Information:- V N A SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74920DL1998PTC091780

Company & Directors' Information:- G SECURITY (INDIA) PRIVATE LIMITED [Active] CIN = U74920MH2004PTC150235

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74920MH2005PTC152956

Company & Directors' Information:- S R SECURITY PRIVATE LIMITED [Active] CIN = U74110MH2005PTC152956

Company & Directors' Information:- J S SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74920HR2008PTC037747

Company & Directors' Information:- B D SECURITY PRIVATE LIMITED [Active] CIN = U74920JK2006PTC002638

Company & Directors' Information:- R. P. S. S. SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U93090UP2017PTC092692

Company & Directors' Information:- G I SECURITY PRIVATE LIMITED [Active] CIN = U74140WB1993PTC057724

Company & Directors' Information:- CENTRAL SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U72900TN2014PTC096705

Company & Directors' Information:- L K SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U93030UP2015PTC068449

Company & Directors' Information:- S. B. SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74999UP2016PTC086112

Company & Directors' Information:- R M G SECURITY PRIVATE LIMITED [Strike Off] CIN = U74910TN1997PTC038969

Company & Directors' Information:- G D A SECURITY PVT LTD [Active] CIN = U74899DL1973PTC006424

Company & Directors' Information:- H K SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74920MH2002PTC136385

Company & Directors' Information:- A G SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74900MH2013PTC239505

Company & Directors' Information:- P G SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U24232DL2005PTC132138

Company & Directors' Information:- M & D SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74120DL2008PTC173377

Company & Directors' Information:- J S D SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2009PTC197167

Company & Directors' Information:- M. SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920WB2000PTC092218

Company & Directors' Information:- D & G SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U93000WB2011PTC165782

Company & Directors' Information:- D AND R SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920JH2013PTC001793

Company & Directors' Information:- S M SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL1996PTC007805

Company & Directors' Information:- J AND J SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC128735

Company & Directors' Information:- E-1 SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74910OR2012PTC014996

Company & Directors' Information:- J S S SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920PB2005PTC028528

Company & Directors' Information:- W B SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920RJ2012PTC040905

Company & Directors' Information:- R. D. SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920PN2010PTC135994

Company & Directors' Information:- K N R SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U93000MH2010PTC204385

Company & Directors' Information:- S P SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U93000PN2014PTC150722

Company & Directors' Information:- G T I SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2013PTC251541

Company & Directors' Information:- S. P. INVESTIGATION SERVICES PRIVATE LIMITED [Active] CIN = U74999MH2015PTC267348

Company & Directors' Information:- J. B. C. SECURITY PRIVATE LIMITED [Active] CIN = U74999MH2017PTC302126

Company & Directors' Information:- R P SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74120UP2011PTC046112

Company & Directors' Information:- S. P. S. S. SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74120UP2016PTC076893

Company & Directors' Information:- H N S SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74900TG2013PTC089837

Company & Directors' Information:- INVESTIGATION AND SECURITY SERVICES INDIA PVT LTD [Active] CIN = U74920TG1964PTC001010

Company & Directors' Information:- P. S. SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74920UP2008PTC035914

Company & Directors' Information:- B J U SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920UP2010PTC039772

Company & Directors' Information:- S A SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U93000UP2014PTC062073

Company & Directors' Information:- B. R. S. SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U93030UP2013PTC059573

Company & Directors' Information:- B & I SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74900WB2013PTC190717

Company & Directors' Information:- A P B N SECURITY & INVESTIGATION PRIVATE LIMITED [Strike Off] CIN = U74140WB1999PTC090080

Company & Directors' Information:- R L SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74999JK2015PTC004376

Company & Directors' Information:- S R S SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U95000DL2000PTC106902

Company & Directors' Information:- G G SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U00000DL2001PTC109868

Company & Directors' Information:- M R S SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140DL2013PTC247541

Company & Directors' Information:- S M SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2004PTC125744

Company & Directors' Information:- T & E SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2011PTC220586

Company & Directors' Information:- AT SECURITY PRIVATE LIMITED [Strike Off] CIN = U74999DL2012PTC234962

Company & Directors' Information:- R SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U93000DL2011PTC213180

Company & Directors' Information:- L N T SECURITY PRIVATE LIMITED [Strike Off] CIN = U74899DL2001PTC109776

Company & Directors' Information:- A.N.D SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900DL2009PTC193787

Company & Directors' Information:- M K G SECURITY SERVICES PRIVATE LIMITED [Under Process of Striking Off] CIN = U74920DL2005PTC141445

Company & Directors' Information:- A V SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U74920DL2008PTC181601

Company & Directors' Information:- R-4 SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2001PTC113509

Company & Directors' Information:- S O L SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2002PTC115968

Company & Directors' Information:- V AND A SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC125411

Company & Directors' Information:- H S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2004PTC127249

Company & Directors' Information:- T F SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2005PTC143337

Company & Directors' Information:- M P S SECURITY PRIVATE LIMITED [Under Process of Striking Off] CIN = U74920DL2007PTC169952

Company & Directors' Information:- V M SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2008PTC185522

Company & Directors' Information:- N K SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2009PTC191230

Company & Directors' Information:- M H SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2013PTC255582

Company & Directors' Information:- P & D SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920HR2013PTC048169

Company & Directors' Information:- P T SECURITY SERVICES PRIVATE LIMITED [Active] CIN = U67120KA2013PTC070724

Company & Directors' Information:- H S R SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920KA2012PTC064955

Company & Directors' Information:- M AND G SECURITY PRIVATE LIMITED [Active] CIN = U74920HR2020PTC087465

Company & Directors' Information:- SECURITY & SERVICES (INDIA) PVT LTD [Strike Off] CIN = U74140WB1977PTC030902

Company & Directors' Information:- I S S SECURITY PRIVATE LIMITED [Strike Off] CIN = U74920DL2000PTC103574

Company & Directors' Information:- N R V SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920CH2007PTC030824

Company & Directors' Information:- S V M SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U93090DL2006PTC153793

Company & Directors' Information:- R A R SECURITY SERVICES PRIVATE LIMITED [Strike Off] CIN = U74920DL2006PTC154147

    Final Order No. 41464/2017 in Appeal No. ST/40731/2017-SM

    Decided On, 01 August 2017

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai

    By, THE HONORABLE JUSTICE: ARCHANA WADHWA
    By, MEMBER

    For Petitioner: J. Shankar Raman, Advocate And For Respondents: B. Balamurugan, AC (AR)



Judgment Text


1. The appellant is engaged in providing Security Agency Services and holds a proper service tax registration for the same. The appellant was also paying service tax on the various Security Services being provided by them. As per investigations made by the officers of Service Tax Commissionerate, it was found that during the period from 2005-06 to 2009-10, the appellant misdeclared the taxable value of the services in their ST-3 returns and as a consequence, there was short-payment of service tax to the extent of Rs. 34,86,916/-. Based upon the result of investigation, proceedings were initiated against them by way of issuance of show cause notice dated 12-4-2011, which resulted in passing of an order by the original adjudicating authority. Vide his impugned order, the adjudicating authority confirmed the demand of Rs. 34,86,966/- and as the appellant had already deposited an amount of Rs. 26,03,367/- and interest of Rs. 6,98,079/- he appropriated the same. In addition, penalty was also imposed under Section 78 of the Act.

2. Being aggrieved with the said order, the appellant filed an appeal before Commissioner (Appeals) on the sole ground that inasmuch as they have deposited the service tax before issuance of the show cause notice, along with interest, no proceedings should have been initiated against them as envisaged in Section 73(3) of the Finance Act, 1994. For the above proposition, they relied upon the Board's Letter F. No. 137/167/2006-Cx.4, dated 3-10-2007 clarifying that no show cause notice need to be issued for imposing penalty if the assessee has paid the service tax and interest before issuance of the show cause notice.

3. However, Commissioner (Appeals) did not find favour with the above contention of the appellant. He observed that service tax was not being paid by the appellant and it was only as a result of investigation their failure came to the forefront. Admittedly, when they were confronted with the said nonpayment evidences, they were left with no other choice but to pay the service tax. In such a scenario, the provisions of Section 73(3) are not applicable and inasmuch as, Section 78 provides for imposition of penalty, the impugned order imposing penalty upon the assessee is appropriated. Accordingly, he upheld the same and rejected the appeal. Hence, the present appeal.

4. After hearing both sides, I find that the challenge in the present appeal is only to imposition of penalty. The facts of the case are not in dispute and the appellants have not given any valid and justifiable reason for non-disclosure of the value of the services being provided by them. It is seen that such suppression of the value of the services was for a longer period of almost five years i.e., from 2005-06 to 2009-10. No explanation came forth from the appellant as to why. the value of the services were not being disclosed correctly in their ST-3 returns except a feeble effort on their part to show that as the said failure has occurred on account of non-receipt of payment from the customers.

5. Section 78 of the Finance Act, 1994 provides for imposition of penalty for suppression of the value of taxable services. It clearly lays down that where any service tax has not been levied or paid as has been short-levied or short-paid by reason of fraud; collusion; wilful misstatement; suppression of acts; or contravention of any provisions with an intent to evade payment of service tax shall also be liable to pay the penalty, which shall not be less than the amount of service tax evaded. The proviso to the said section further provides that where the service tax along with interest is paid within the 30 days from the date of communication of the order of the officer determining such service tax, the amount of penalty liable to be paid by such person shall be 25% of the service tax determined. The second proviso further provides that for the benefit of reduced penalty under the first proviso would be available only if the amount of penalty so determined has also been paid within the period of 30 days.

5.1 As is seen from the above, there is a clear mandate of law provided under Section 78 of the Finance Act, 1994 that any person, who has not paid or short-paid the tax on account of any fraud; collusion; wilful misstatement; or suppression of facts or has evaded any tax provisions with an intent to evade payment of duty would be liable to equal amount of penalty.

5.2 The question required to be decided in the present appeal is whether such non-payment of service tax by the appellant was on account of any one of the ingredients mentioned in the said Section 78. As already observed, the appellant is filing the statutory returns but were not reflecting the value of entire services provided by them for a period of almost five years. The said non-payment was detected by the department on investigations made against them. It cannot be held that such non-payment of service tax or even non-disclosure of the value of the same in the return was on account of the non-receipt of compensation from the clients. The appellant has not placed any evidence on record to show that they had not received the value of the said services from their customers for such a long period. Even otherwise, I find that the payment of service tax is the legal obligation of the service provider, irrespective of the fact of receipt of value of the service from service recipient. All these factors lead to an inevitable conclusion that there was mala fide on the part of the appellant to suppress the value of the services and not to pay service tax on the same. As such, I hold that they are liable to penalty under Section 78 of the Finance Act, 1994.

6. Learned advocate has contended that inasmuch as, they had paid the service tax along with interest [a part] prior to issuance of the show cause notice, there was no justification for the show cause notice to be issue, in terms of the provisions of Section 73(3) of the Finance Act, 1994. Having gone through the same, I find that if an assessee deposits the service tax, either on the basis of his own ascertainment or on the basis of tax ascertained by a Central Excise officer, before the service of the notice on him, the requirement of serving any show cause notice gets diluted and the same is not required to be issued. However, sub-section (4) of Section 73 is to the effect that sub-section (3) shall not apply in a case where service tax has not been levied or paid on account of fraud; wilful misstatement; or suppression of facts. As I have already held that non-payment in the present case was on account of suppression and with mala fide, the provisions of Section 73(3) would not get attracted.

7. Similarly, the appellant's claim of invocation of Section 80 of the Finance Act, 1994 can also not to be appreciated inasmuch as, the said section applies only if the assessee proves that there was "reasonable cause" for the failure to deposit. The appellant, in the present case, is a registered service provider and is paying service tax on the value of the services. It is only that such value was not being fully disclosed, with a mala fide intention to evade payment of service tax on the same. As such, there was no reasonable cause on the part of the appellant

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to believe that the service tax was not required to be paid. Accordingly, I hold that the said section is also not applicable to them. 8. Similarly, the appellant's claim to reduce the penalty to 25% in terms of the proviso to Section 78 can also not to be appreciated inasmuch as, the benefit of reduced penalty can be extended only if the entire service tax along with interest and along with 25% penalty is deposited within 30 days of the passing of the order of determination of service tax. Learned advocate fairly agreed that such penalty to the extent of 25% has not been deposited by them. In such a scenario, benefit cannot be extended. For the foregoing reasons, I find no merits in the appellant's contention to set aside penalty. The impugned order is, accordingly, upheld and appeal is rejected.
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