1. This appeal is filed by the appellant against Order-in-Appeal No. VIZ-EXCUS-002-APP-059-16-17, dated 26.09.2016.
2. Heard both sides and perused the records.
3. The issue involved in this appeal is that appellants were providing ground handling services to airlines during the relevant period at the air ports. A show cause notice was issued alleging that appellant had not discharged the service tax liability correctly and a demand of Rs. 26,28,638/- towards service tax for the period 2008-09 to 2012-13 along with applicable interest was proposed in the show cause notice. It was also proposed to impose penalties under sections 76, 77 & 78 of Chapter V of Finance Act, 1994 on the appellant. After hearing the appellant and his explanation, the lower authority in his Order-in-Original dated 21.02.2014, agreed that the appellant was not liable to pay service tax prior to July 2010 in respect of the airport services and therefore dropped the demand to that extent. As far as the demand for the period subsequent to this date was concerned, he found that the ST-3 returns filed by the appellant did not reflect the true and full value of the services rendered and therefore they have not fully discharged their service tax liability. He calculated the actual service tax liability, taking the net gross receipts of the appellant during the period from their profit & loss accounts and calculated the net taxable value including the service tax. Reckoning this amount as the tax cum value, he reckoned the service tax liability by calculating backwards. Accordingly, he confirmed the demand of only Rs. 2,76,702/- in respect of the airport services rendered by the appellant along with interest. He further imposed a penalty equivalent to the service tax amount under section 78 of the Finance Act, 1994 for contravention of provisions of Section 68 with an intention to evade payment of service tax. He further imposed a penalty of Rs. 10,000/- on them under section 77 of the Finance Act, 1994. Aggrieved, the appellants preferred an appeal before Commissioner (Appeals), who upheld the Order-in-Original entirely and rejected the appeal. This appeal is against this order of Ld. Commissioner (Appeals).
4. Ld. Counsel for the appellant submitted that there is no dispute on the facts of the case. They were not liable to pay tax of the airport service before 01.07.2010 as they were not authorized by the Airports Authority of India. This was agreed to by the lower authorities and was upheld by the Commissioner (Appeals). For the period subsequent to 01.07.2010, he explained that the difference in service tax occurred as they were reckoning service tax and paying the same when they received the amount for the service, while they should have considered the amount payable and paid service tax whenever the amount was accrued to them, whether or not the amount was actually received. It was his contention that this was a genuine mistake by them and they should not be penalized for it. It is his further contention that since they were paying service tax on the basis of receipts instead of accruals, they would have paid the service tax on these amounts subsequently at some point of time and hence the entire matter may be remanded back to the original authority for recalculation and re-adjudication. On a specific query from the Bench whether they have any evidence to show that the amount which was demanded in the present case was already paid by them subsequently, he replied in negative. He also confirmed that they presented no such calculations either before the original authority or the first appellate authority. He further argued that merely not accurately reflecting the figures in the ST-3 returns because of following the wrong system of accounting should not be construed as suppression of facts. Accordingly, no penalty should be imposed on them. He relied on the following case laws:
(a) CCE Salem vs. JSW Steel Ltd. [2017 (6) G.S.T.L. 397 (Mad.)]
(b) Om Sai Professional Detective & Security Service Pvt. Ltd. vs. CCE, Guntur : 2008 (12) S.T.R. 79(Tri.-Bang.)]
(c) Ram Krishna Travels Pvt. Ltd. vs. CCE Vadodara : 2007 (6) STR 37 (Tri.-Mum.)]
(d) CCE, Trichy vs. Rasi Travels & Cargo Pvt. Ltd : 2008 (11) STR 378 (Tri.-Chennai)
(e) CCE, Tirunelveli vs. Ashok Security Services : 2008(9) STR 359 (Trib.-Chennai)
(f) CST vs. Skematic Consultants : 2007 (7) STR 575 (Tri.-Kolkata)]
(g) Secretary, Town Hall Committee vs. CCE, Mysore : 2007 (8) STR 170 (Tri.-Bang.)]
(h) CCE, Jaipur-I vs. Sikar Ex. Serviceman Welfare Co-operative Society Limited : 2006 (4) STR 213 (Tri.-Del.)]
(i) Haldia Petrochemicals Limited vs. CCE, Haldia : 2006 (197) ELT 97 (Tri.-Del.)]
(j) Hindustan Steel Ltd. vs. State of Orissa [1978(2) E.L.T. (J 159) (S.C.)]
(k) Sumeet Industries Ltd. vs. CCE, Surat : 2004 (164) E.L.T. 335 (Tri.-Mumbai)].
5. Ld. DR, on the other hand, reiterated the arguments made in the Order-in-Original and Order-in-Appeal. He said that there is no dispute on the facts of the case and whatever relief the appellant was entitled to, was already granted by the original authority in his Order-in-Original. Admittedly, the appellant has not shown the true value of the services rendered by him in his ST-3 returns nor paid the service tax on it. In the scheme of self-assessment, it is the duty and responsibility of the appellant assessee to ensure to disclose the true value of the services rendered as per rules and pay service tax accordingly and also to file ST-3 returns with correct values therein. The appellant failed to do so and this issue was unraveled only when the department had undertaken a detailed investigation. He, therefore, prayed that the appeal must be dismissed. He relied on the following case laws:
(a) Lakhan Singh & Co. vs. CCE Jaipur : 2016 (46) S.T.R. 297 (Tri.-Del.)]
(b) Avtar Sodhi vs. CCE, Ludhiana : 2016 (46) S.T.R. 547 (Tri.-Del.)]
(c) CCE Rajkot vs. Ashish Anand & Co : 2013 (31) STR 26 (Tri.-Ahmd)]
6. I have gone through the records of the case and considered the submissions on both sides including the case laws they relied upon. It is not in dispute that appellant had not discharged the full service tax liability by not disclosing the full value of the services rendered by them in their ST-3 returns. It is only the investigation of the department which revealed the true value. I find no reason to agree with the Counsel for the appellant that this case should be remanded back to the original authority. Firstly, once a show cause notice is issued, the original authority or the appellate authority cannot go beyond the scope of show cause notice and investigate if the assessee have paid the tax at a subsequent stage. It does not appear from the records that the appellant has put forth as his defence at any stage that they have, in fact, paid the service tax demanded on a subsequent date. Even during this hearing, the Counsel for the appellant has not put forth any data to show that the service tax which was demanded was already paid by them subsequently. I, therefore, find that the appellant has not correctly reflected the value of the services rendered by them in their ST-3 returns or paid service tax thereon. When the return h
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as to be filed by the appellant, it is expected that they reflect the correct figures in the returns and not by doing so, they have suppressed the value of the services and thereby evaded payment of service tax. Therefore, penalty is imposable under section 78 of the Finance Act, 1994 for not payment of service tax. Penalty is also correctly imposed under section 77 of the Finance Act, 1994 for the violations mentioned in the Order-in-Appeal. None of the case laws cited by the appellant squarely cover their case and hence the ratio will not apply. The original authority has correctly confirmed the demand along with interest and imposed penalties and the first appellate authority was correct in upholding the Order-in-Original. I find no reason to interfere with the Order-in-Appeal. 7. The appeal is rejected.