Custom, Excise & Service Tax Tribunal
Dream Spa Enterprises vs Meerut-I on 14 October, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No.II
Service Tax Appeal No.70349 of 2024
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-101-23-24 dated
08/06/2023 passed by Commissioner (Appeals) Central Goods & Services
Tax, Noida)
M/s Dream Spa Enterprises, .....Appellant
(Shop No.320-21, 314-15, 1st Floor, Supertech
Shoprix Mall, Sector-61, Noida-201301)
VERSUS
Commissioner of Central Excise &
CGST, Meerut-I ....Respondent
(CGST, Division-II, Noida) APPEARANCE:
None, for the Appellant Smt Chitra Srivastava, Authorised Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70711/2025 DATE OF HEARING : 13 August, 2025 DATE OF PRONOUNCEMENT : 14 October, 2025 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No. NOI- EXCUS-001-APP-101-23-24 dated 08.06.2023 of the Commissioner, CGST (Appeals), Noida By the impugned order appeal filed by the appellant against Order-in-Original No.40/AC/Div-II/Noida/2020-23 dated 21.10.2022 holding as follows has been dismissed Order
(i) I confirm the demand of Service tax of Rs.17,28,847/-
(Rupees Seventeen Lakhs Twenty Eight Thousand Eight Hundred and Forty Seven only) under provisions to Section 73(1) of the Finance Act,1994. Since the party had already deposited Rs.5.0 Lakhs vide Challan no.50019 dated 11.12.2017. I order for appropriation of the said paid Service Tax Appeal No.70349 of 2024 2 service tax against the above confirmed demand of service tax.
(ii) I allow the cenvat credit of Rs.3,98,737/- and its adjustment against the above confirmed demand during respective periods.
(iii) I confirm the demand of interest at appropriate rate on the aforesaid amount of service tax under Section 75 of the Finance Act, 1994 & order for recovery of the same.
(iv) 1 drop the demand of Rs.5,48,896/-(Rupees Five Lakhs Forty Eight Thousand Eight Hundred and Ninety Six only).
(v) I impose penalty of Rs.17,28,847/- (Rupees Seventeen Lakhs Twenty Eight Thousand Eight Hundred and Forty Seven only)under Section 78 of the Finance Act, 1994. If the amount as determined under Section 73 above is paid within 30 days from the date of receipt of the order along with the interest payable thereon as, per Section 75, penalty will be only 25% of the service tax determined under Section 73. The benefit of reduced penalty shall be available only if the amount of penalty so determined has also been paid within the period of30 days from the receipt of the order.
(vi) I drop the demand of penalty under Section 76 of Fiancé Act,1994
(vii) I impose penalty of Rs.5,000/- (Five Thousand only) under Section 77(2) of Finance Act.1994 The dues adjudged above, be paid forthwith.
2.1 Appellant is holding Service tax No.AOYPK6859BSD001, for providing services of "Health Club & Fitness Centre Service and Beauty Parlour / Beauty Treatment services covered as taxable service under clause (51) read with clause (44) of Section 65B of the Act.
2.2 During the search proceedings initiated by the Deputy Director, DGGI, Regional Unit, Ghaziabad in the premise of M/s RDS Hospitality Pvt. Ltd. on 08.12.2017, month-wise daily sale sheets of the appellant were resumed by the investigating agency and it was gathered that Shri Gufran Khan, one of the Service Tax Appeal No.70349 of 2024 3 Directors of M/s RDS Hospitality Pvt. Ltd., is also a proprietor of M/S DSE situated and operating from shop No. 320-321 & 314- 315, First Floor, Supertech Shopprix Mall, Sector-61, Noida.
2.3 On the basis of the analysis of documents resumed by the DGGI, Ghaziabad, recorded statement under Section 14 of the erstwhile Central Excise Act, 1944 of Shri Gurfran Khan, it was revealed that during the period from September 2015 to June 2017 the appellant in their filed ST-3 returns had mis-stated and suppressed the taxable value with the intent to evade payment of service tax, the appellant has evaded service tax amounting to Rs.22,77,743/- against the taxable services rendered by them. It was also disclosed that the CENVAT Credit other than Rs. 46,454/- reflected in their ST-3 3 return is not admissible to the appellant as the appellant failed to take the CENVAT Credit against them within the prescribed time limit.
2.4 A show cause notice dated 21.02.2020 was issued to the appellant asking them to show cause as to why:
(i) Service tax amounting Rs. 22,77,743/- (Twenty Two lakh Seventy Seven Thousand Seven hundred Forty three only) not paid (including Swachh Bharat Cess, Krishi Kalyan Cess as applicable) against the taxable services rendered by them during the period from September 2015 to June 2017, should not be demanded and recovered from them under proviso to Section 73(1) of the of the Finance Act, 1994 read with Section 119 of the Finance Act, 2015 and Section 161 of the Finance Act. 2016:
(ii) Service tax amounting to Rs. 5,00,000/- voluntarily deposited by the noticee vide Challan no.50019 dated 11.12.2017 during the course of investigation, should not be appropriated against the demand of service tax as demanded at (i) above;
(iii) Interest at applicable rates under the provisions of section 75 of the Finance Act, 1994, should not be demanded and recovered from them on the amounts of service tax as demanded at (i) above;
Service Tax Appeal No.70349 of 2024 4
(iv) Penalty under section 76 of the Finance Act, 1994 should not be imposed on them for failure to pay service tax on the taxable services;
(v) Penalty under section 77(2) of the Finance Act, 1994 should not be imposed on them for their failure to assess the correct service tax and to file the periodical ST-3 returns on the due dates in respect- of the taxable service provided by them;
(vi) Mandatory penalty under section 78 of the Finance Act, 1994 should not be imposed on them for their willful suppression and misstatement of the relevant facts -and contraventions of the above said provisions of the Finance Act, 1994 and rules made there under with intent to evade payment of service tax;
2.5 The show cause notice was adjudicated as per the order original referred in para 1 above.
2.6 Aggrieved appellant filed appeal before Commissioner (Appeal), which has been dismissed as per the impugned order.
2.7 Hence this appeal 3.1 This matter had been listed for hearing in past on 15.05.2025, 05.06.2025, 11.07.2025 and 16.07.2025. Appellant has either been unrepresented on these days or have requested for adjournment either by way of written communication or through a proxy counsel. Matter was listed on 13.08.2025. This date was fixed in the presence of proxy counsel Ms. Stuti Saggi on 16.07.2025. However on this none appeared nor any communication has been received from the appellant. Section 35 C (1A) of the Central Excise Act, 1944 as made applicable to service atx matters by Section 83 of Finance Act, 1994 reads as follows:
35C. Orders of Appellate Tribunal.
(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and Service Tax Appeal No.70349 of 2024 5 adjourn the hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
As per the above statutory provision the matter could not have been adjourned for more than three times on the request of the appellant. Already it has been adjourned four times, i.e. more than statutorily provided number and could not have been adjourned any further, so has been taken up for consideration on the basis of records and after hearing the Authorized Representative of the revenue in terms of Rule 20 of CESTAT Procedure Rules, 1982.
3.2 Authorized representative reiterated the findings recorded in the impugned order.
4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Impugned order records the findings as follows:
"7. The case of the department is that the appellant had been providing health club and fitness centre and beauty parlour/ beauty treatment service and collected consideration in cash as well as through banking / digital mode, however, did not pay Service Tax by not showing all receipts in books of account thereby suppressed the actual receipts against provision of service. The demand was raised on culmination of investigation initiated by the DGGI officers. The adjudicating authority has calculated the demand allowing benefit of cum-tax price and also CENVAT Credit of duty tax paid on inputs input services.
Considering the overall facts and circumstances of the case he has confirmed demand of Service Tax to the extent of Rs. 17,28,847/- and allowed adjustment of CENVAT credit of Rs. 3,98,737/-.
8. While challenging the confirmation of demand, the appellant submitted that the 'daily sale sheets' resumed Service Tax Appeal No.70349 of 2024 6 during search conducted on 08.12.2017 pertain to M/s Dream Spa Centre and not to the appellant (M/s Dream Spa Enterprises). I observe that during recording of statement Shri Gufran Khan on 08.12.2017, proprietor of the appellant did not raise any such objection. During investigation or even in the reply to the Show Cause Notice filed on 24.08.2022 the appellant had not taken this ground. I further find that the said `daily sale sheets' were recovered from the premises of M/s RDS Hospitality Pvt. Ltd. wherein Shri Gufran Khan was one of the Directors. He could have explained at that point of time that M/s Dram Spa Centre is different firm and he was not proprietor of that firm. Rather he admitted that the said sheets belonged to him. Moreover, the appellant has not explained as to why such papers were found lying in and recovered from the premises of M/s RDS Hospitality Pvt. Ltd., when he has no concern with M/s Dream Spa Centre. Surprisingly, rather than proving that M/s Dream Spa Centre is not proprietary concern of Shri Gufran Khan, the appellant is trying to shift the burden to prove the same on the department, which cannot be permitted at the appeal stage. Thus, I hold that there is no substance in this argument of the appellant.
9. The appellant has contested the confirmation of demand in the impugned order on the ground of limitation. I find that the demand in the instant case by and large has been calculated on the basis of data found in the `daily sale sheets' recovered during search proceedings. The allegation against the appellant is that the amount collected in cash by the appellant as reflected in `daily sale sheets' was not reflected in the ST-3 returns and/or his books of account. This allegation is substantiated and corroborated by the department by the confessional statement of the proprietor of the appellant firm wherein he categorically admitted that the amount reflected in `daily sale sheets' was suppressed by not reflecting the Service Tax Appeal No.70349 of 2024 7 same in ST-3 returns and even in statutory records. This is clear act of suppression of facts with intent to evade payment of Service Tax on the part of the appellant. I am unable to concur with the submissions of the appellant in view of the fact that if this act of his is not suppression of fact, then what else would be. I hold that the adjudicating authority is right in invoking extended period of limitation."
4.3 Appellant in their appeal have contested the impugned order on the following grounds:
Demand of service tax has been issued on the basis of an excel sheet resumed from a premises other than that of appellant, therefore a demand raised on the basis of such document cannot sustain.
The data in the month wise daily sale sheet for the period September 2015 to October 2017 alleged to be of the appellant did not match with the balance sheet, bank statement or bill receipt book, but cash entries from daily excel sheet and credit entries in bank accounts were picked up to arrive at the taxable value. Reliance is placed on the o decision in case of Bansal Electric Works [Final Order No A/70187/2017-SM/BR dated 17.02.2017 of Allahabad Bench)];
o Circular No 1053/02/2017-CX dated 10.03.2017. Appellant is less educated person and was not aware of the documents which were signed by him on 11.12.2017 while tendering his statement.
The round taken for invoking extended period in the show cause notice was not applicable.
Demand of interest is not applicable.
The penalty under section 77(2) & 78 of Finance At, 1978 is not imposable.
4.4 Before I proceed further it will worthwhile to go through the extracts from the show cause notice reproduced below, which is enough to demolish the entire case put up by the appellant in their defence in appeal.
Service Tax Appeal No.70349 of 2024 8 "3. INTELLIGENCE AND INVESTIGATION:
3.1 Whereas during the search of the premises of M/s RDS Hospitality Pvt. Ltd. on 08.12.2017, month-wise daily sale sheets of noticee were resumed from the said premises and it was gathered that Shri Gufran Khan, one of the Directors of M/s RDS Hospitality Pvt. Ltd., is also a proprietor of M/s DSE, situated and operating from shop No. 320-321 & 314-315. First Floor, Supertech Shopprix Mall, Sector-61, Noida. The month-wise daily sale sheets resumed under Panchnama dated 08.12.2017 indicate turnover beyond exemption limit in all the three years 2015-16, 2016-17 and 2017-18 (up to June ) but no service tax was found to have been paid as per ST-3 returns filed.
3.2 During course of search following documents were resumed:
(i) Month-wise daily sale sheet printout 3.3 STATEMENT RECORDED ON THE SPOT:
A statement of Shri Gufran Khan, proprietor of M/s DSE was recorded under Section 14 of the Central Excise Act, 1944 on the spot. Relevant extract of the same are reproduced below:
He has opened Dream Spa Centre in Shopprix Mall for Body Spa and Massage and had taken registration for the company and he is running the company since September 2015 The sheets for the period September 2015 to October 2017 pertaining to Dream Spa Centre which were recovered from the premises of his company were shown to him and put his dated signature on all the sheets. He admitted that all these receipts are received in respect of services rendered by Dream Spa Centre.
3.4 LETTERS/ SUMMONS ISSUED AND STATEMENTS RECORDED/ DOCUMENTS FURNISHED:
(i) The statement of ShriGufran Khan, Proprietor was recorded under Section 14 of the Central Excise Act,1944 on 11.12.2017 wherein he inter-alia stated that:
Service Tax Appeal No.70349 of 2024 9 his earlier statement dated 08.12.2017 was shown to him and after reading it, he certified it with his dated signature. Today, on 11.12.2017, he was shown month-wise daily sheet of sale for the period from September 2015 to October 2017, according to which the year-wise sale turnover of M/s Dream Spa Enterprises, Noida is Rs.38,59,280/- during 2015-16, Rs.86,94,846/- during 2016-17 and Rs. 21.26.608/- during 2017-18 the firm started its activity only from September 2015. He has received the payments in different modes viz. cash, credit card, coupon/nearby/little (e- commerce online platform); The cash payments include the tip of massager and the massager is paid 70% and he keeps 30% of cash receipts. He maintains a register for this distribution, which will be submitted when he next visits this office. The credit card payments include 1.5% commission of banks and coupon/nearby/little payments include 20% commission. The reconciliation chart in this regard will be submitted when he next visits this office since 2015-16 He is not proprietor or partner in any other proprietorship or partnership firm and he has not provided any taxable service.
He is Director in M/s RDS Hospitality Pvt. Ltd. since January 2016.
He will provide all the bills which he has issued since 2015-
16. After some days Payment receipts booklet for the period April 2016 to June 2017 were furnished, He will provide all ITRs & Balance sheets since 2015-16 till date on his next visit.
He takes all the responsibilities of service tax due upon his aforesaid firm and will deposit the same. He has voluntarily deposited Rs. 5,00,000/- vide challans No. 50019 dated 11.12.2017.
(ii) Summons dated 13.02.2018 was issued to Sh. Gufran Khan, Proprietor of M/s DSE for production of following documents and records:
Service Tax Appeal No.70349 of 2024 10
(a) Sale bills
(b) Register 70% & 30% distribution of cash sale.
(c) Bank Accounts statements and reconciliation chart in respect of Commission collected against payments for the last five years upto June, 2017.
(d) ITR and Balance sheet for the last five year upto June, 2017 The noticee provided only copies of 'bank statement in r/ account number 706801010050125 maintained at Union Bank
(iii) Summons dated 13.11.2018 and 27.12.2018 (RUD-6) was issued to Sh. Gufran Khan, proprietor of M/s DSE seeking following information and documents:
(a) Register 70% & 30% distribution of cash sale.
(b) Ledgers upto June 2017
(c) Balance Sheet upto financial year 2017-18
(d) Self-attested copies of all invoices/ sale bills issued up to June 2017.
(e) Copies of ST-3 returns filed for the tax period up to June 2017.
(f) Bank account statements and re-conciliation chart in respect of commission collected against payments for the period up to June 2017
(g) Income Tax return for the Financial Year up to 2017-18.
(h) 26AS form for the Financial Year up to 2017-18.
4. The noticee vide their letter 11.01.2019 furnished following documents:
(i) Service Tax Reconciliation statement for the period October 2015 to March 2016, April 2016 to March 2017 and April 2017 to June 2017.
(ii) Service Tax Challan no.50019 dated 11,12.2017 of Rs.
5,00,000/-
(iii) ITR for financial year 2015-16, 2016-17 and 2017-18.
(iv) Balance Sheet for financial year 2015-16, 2016-17 and 2017-18.
(v) Service Tax Input bills
Service Tax Appeal No.70349 of 2024
11
(vi) Bank Statement
(vii) Service Tax Registration Certificate
(viii) Service Tax returns (filed by CA fraudulently with nil and wrong data) as claimed by the proprietor of the noticee for the (RUD-13).
5. ANALYSIS OF DOCUMENT RESUMED AND SUBMITTED:
ST-3 RETURN:
The noticee furnished ST-3 returns filed for the period April 2015 to September 2016, vide letter dated 11.01.2019 and has further informed that the ST- 3 returns were filed by Chartered Accountant fraudulently with nil and wrong data. The relevant details disclosed in these returns are as under:
(Amount in. Rs.)
Period Date of Service Gross S.Tax S.Tax paid
Filing Name Receipt/ payable
Taxable Cash Cenvat
value
April15- 21.10.15 Health club 0 0 0 0
Sep'15 & Fitness
Centre
Beauty 0 0
Parlour
Oct'15 to 22.04.16 Health club 320368 46454 0 44852
Mar 16 & Fitness
Centre
April 16- 25.10.16 Health club 0 0 0 0
Sep'16 & Fitness
Centre
Beauty 0 0
Parlour
On perusal of the ST-3 Returns filed by the noticee, it appears that the notice have not filed ST- 3 returns for the period October 2016 to June 2017. In the returns filed for the period April 2015 to September 2016, the noticee has only declared provision of taxable value of Rs. 3,20,368/- and all the Service tax dues including Swatch Baharat Cess attributable to the said taxable value amounting to Rs. 46,454/- was paid through CENVAT credit.
5.1 It is further noticed that an amount of Rs. 1,602/-
pertaining to Swachh Bharat Cess liability also paid through CENVAT credit which, is otherwise not admissible to them in Service Tax Appeal No.70349 of 2024 12 terms of Rule 3 of CENVAT Credit Rules, 2004, as amended. Hence, Service Tax amounting to Rs.1,602/- paid through availing and utilising CENVAT credit on Swachh Bharat Cess in the ST-3 returns filed for the period October 2015 to March 2016 is apparently has not been paid by the noticee.
(ii) BALANCE SHEET Balance Sheets for the financial years 2015-16 to 2017-18 furnished by the noticee are neither in proper format nor signed by proprietor and Chartered Accountant. Thus, the same are not statutory and reliable documents. The amounts of Gross receipts shown therein are as under;
(Amount in Rs.)
Financial Year Gross Remark
receipt.
2015-16 2463753 Amount not reliable as balance sheet not
signed by Chartered statutory Accountant 2016-17 4241262 2017-18 2610870 Even if the above gross receipts shown in unsigned Balance sheet is taken into account it is observed that the noticee have received money from their customers as consideration for provision of taxable service, and have not disclosed the gross receipts shown in their unsigned Balance sheets in the ST-3 returns filed for the corresponding period.
(iii) INCOME TAX RETURN:
Income Tax returns for the financial year 2015-16, 2016-17 reflects following details:
Financial Year Gross receipt Total
Non-Banking Banking Channel
2015-16 2463753
2016-17 1031989 3209273 4241262
2017-18 1012510 1598360 2610870
The gross receipt amounts shown in Income Tax returns confirm receipt of consideration by the noticee for provision of taxable service by the noticee, and non-disclosure of correct gross receipts in the ST-3 returns filed for the corresponding period
(iv) MONTH- WISE DAILY SALE IN EXCEL SHEET.
Service Tax Appeal No.70349 of 2024 13 During the search proceeding month-wise daily sale sheets showing daily sale for period September 2015 to October 2017 were resumed under Sl. No. 3 of Annexure-A to the Panchnama dated 08/09.12.2017. The said month-wise daily sale sheet reflect sale receipts, through cash, credit, Groupon, and paytm, and have been signed, acknowledged and certified by the proprietor Sh. Gufran Khan on 08.12.2017, and in his statement dated 08.12.2017 has stated that all these receipts amounts shown in these sheets were related to taxable service provided by M/s DSE.:
It is observed on perusal of month-wise daily sale sheets that in some month- wise sale sheets, the total sale amount for a given month is not sum of daily sale amounts i.e. total sale amount for a month, have not been calculated correctly. Accordingly, month-wise sale has been re-computed from daily sale shown in these monthly sheets and same is annexed as Annexure-I Year- wise summary of the same is as under:
(Amount in Rs.) Financial year CASH CREDIT GROUPON PAYTM TOTAL SALE 2015-16 (Sept' 3254669 796462 161535 0 4336228 onwards) 2016-17 6048600 1788410 871556 18555 8891700 April 17 to June-17 1338187 526818 195462 31141 2126608 G.TOTAL 10641456 3111690 1228553 49696 15354536 On collating the sale data reflected in aforesaid month-wise daily sale sheets, it is observed that the noticee have made total sale of Rs.43,36,228/-. Rs.88,91,700/- and Rs.21,26,608/- including cash sale of Rs.32,54,669/-, 60,48,600/- and 13,38,187/- during September 2015 to March 2016, 2016-17 and April-June 2017 respectively
(v) BILL RECEIPTS BOOK Bill receipt books showing payments received from customers furnished by the noticee for the period April 2016 to June 2017 were collated and month wise annexed as Annexure-II, and year-wise details of the same has been summary is as under:
(Amount in Rs.) Service Tax Appeal No.70349 of 2024 14 Financial Year RECEIPT CREDIT CASH TOTAL April 16 to March 17 669691 2187654 2857345 April 17 to June 2017 206161 562782 768943 The receipt amounts reflected in bill receipts of the noticee confirm receipt of consideration as cash payment and through credit transfer for provision of taxable service to customers.
(vi) BANK STATEMENT:
The bank statement in the name of noticee bearing account No. 706801010050125 maintained in Union Bank of India reflect opening of account on 22.09.2015 and first deposit of Rs.25,000/- by cash on 28.09.20 15.
On examination of the said bank statement, it is observed that amounts have been received in the said account through (i) Point of sale (POS) i.e. by debit/ credit card, (ii) NEFT from Groupon India Pvt.. Ltd, The Makeoverz, ONE97 Communications Ltd, Little Internet Pvt. Ltd., Nearbuy India, Shyam and Group Style Heaven, (iii) Disbursement credit and (iv) cash payment The month-wise summary of amount received by the noticee in the aforesaid bank account under above heads have been computed and collated, and is annexed as Annexure- II1. Year- wise summary of the same is as under:
Period POS NEFT Disbursement Cash Total credit 2015-16 (Sep 859561 159444 50000 75000 1144005 to March) 2016-17 2353103 905011 0 50000 3308114 April 17-June 561984 189940 0 0 751924 17 Grand Total 3774648 1254395 50000 125000 5204043
(vii) CENVAT DOCUMENT:
On examination of purchase invoice furnished by the noticee, it is observed that the bills received are mainly for provision of taxable services viz. Business Auxiliary Services, Building Maintenance Service, Renting services. The details of service tax purchase bills have been prepared and is annexed as Annexure- IV, and year-wise summary of the same is as under:
Service Tax Appeal No.70349 of 2024 15 (Amount in Rs.) Period Taxable Service Swatch Krishi Total Value Tax Bharat Kalyan Tax Cess Cess Oct.2015- Mar. 768967 107630 3005 0 110635 16 Apr 2016- 891000 124740 4458 2972 132170 Sep.2016 Oct.2016- 891000 124740 4458 4458 133656 Mar.2017 April to June 17 148500 20790 743 743 22276 Total 2699467 377900 12664 8173 398737 It appears that the noticee has declared availment of CENV AT credit of Rs. 46,454/- only in their ST-3 return filed for the period Oct 2015 to March 2016. No availment of Cenvat credit have been shown in the ST-3 returns filed for the period April 2015 to September 2015 and April 2016 to September 2016. Also no ST-3 returns have been filed for the period October 2016 to June 201 7 Thus, Cenvat credit of Rs.46,454/- only as availed in the ST-3 return filed for the period Oct 2015 to March 2016 appears to be admissible to the noticee in terms of Rule 4(7) of the CENVAT Credit Rules, 2004, which entails that the provider of output service shall not take CENVAT credit after one year of the date of issue of any documents specified in sub-rule (1) of Rule 9 of Cenvat Credit Rules, 2004, inasmuch as the purchase invoices furnished by the noticee during the course of investigation pertains to period prior to the completion of one year from the date of issuance of such invoices i.e. availment of CENV AT credit is barred from time limitation of one year.
6. ANALYSIS:
6.1 The noticee have taken service tax registration bearing No. AOYPK6859BSD001 on 16.09.2015 for taxable services viz.
"Health Club & Fitness Centre Service and Beauty Parlour/Beauty Treatment, Other Taxable Services- Other than the 119 listed".
Sh. GurfanKhan, proprietor of the firm M/s DSE in his statement recorded on 08.12.2017 has deposed that he has opened Dream Spa Centre in Shoprix Mall for Body Spa and Massage and had Service Tax Appeal No.70349 of 2024 16 taken registration for the firm and is running the company since September 2015. Thus, from his statement, it appears that the noticee has been providing Body spa and Massage service w.e.f September 2015.
6.2 The noticee filed only three half yearly ST-3 returns for the period April 2015 to September 2015, October 2015 to March 2016 and April 2016 to September 2016. On perusal of said ST-3 returns, it appears that no taxable value, service tax payable and service tax paid amounts have been declared in half yearly ST-3 returns for the period April 2015 to September 2015, and for the period April 2016 o September 2016 i.e. nil returns were filed. Only in the half yearly ST-3 retumns for the period October 2015 to March 2016, the noticee have declared taxable value and service tax payable of Rs.3,20,368/- and Rs.46,454/- respectively, and total service tax payable amounting Rs.46,454/- has been paid through CENVAT credit.
6.3 In his statements dated 08.12.2017 and 11.12.2017 proprietor of M/s DSE, Sh. Gufran Khan admitted provision of taxable service viz. Body Spa and Massage and non-payment of service tax thereon. Relevant extract of the same are reproduced below:
The sheets for the period September 2015 to October 2017 pertaining to Dream Spa Centre which were recovered from the premises of his company were shown to him and put his dated signature on all the sheets. He admitted that all these receipts are received in respect of services rendered by Dream Spa Centre.
Today, on 11.12.2017, he is shown month-wise daily sheet of sale for the period from September 2015 to October 2017, according to which the year-wise sale turnover of M/s Dream Spa Enterprises, Noida is Rs,38,59,280/- during 2015-16, Rs.86,94,846/- during 2016-17 and the firm started, its activity only from September 2015. He has received the payments in different modes viz. cash, credit card, coupon/nearby/little (e-commerce online platform); The cash payments include- the tip of massager Service Tax Appeal No.70349 of 2024 17 arid the massager is paid 70% and he keeps 30% of cash receipts. He maintains a register for this distribution, which will be submitted when he next visits this office. The credit card payments include 1.5% commission of banks and coupon/nearby/little payments include 20% commission. He will provide all the bills which he has issued since 2015-
16. (After some days Payment receipts booklet for the period April 2016 to dune 2017 were furnished) 6.4 There is variation in amounts reflected in bill receipts book, month-wise daily sale sheet, amounts received in bank statements through various modes, ITR returns, Balance sheets and gross receipt amount shown in ST-3 returns. A summary of the same is as under:
(Amount in Rs.) PERIOD GROSS RECEIPT ITR Month- Amount ST-3 Balance Bill receipt Wise Daily Received Returns Sheet Book Sale Sheet In Bank 2015-16 2463753 4336228 1144005 320368 2463753 Receipt book not provided 2016-17 4241262 8891700 3308112 0 4241262 2857345 2017-18 (upto Jun) NA 2126608 751923 0 NA 768943 The above data reflected in the noticee's documents/" record, apparently indicate that the noticee have not declared the correct gross taxable receipt in the ST-3 returns filed by them, other statutory returns/ records viz. Income tax returns, Balance sheets, and bill receipt book.
As discussed in preceding paras, the revenue amount declared in Balance sheet and Income tax returns (which reflect the same gross revenue as declared in the Balance sheet) cannot be relied upon as the Balance sheet has not been signed by the proprietor and the Chartered Account. Moreover, the revenue declared in Balance sheet and ITR appears to have been suppressed inasmuch as gross receipt declared therein are less than amount shown in month-wise daily sale sheets and bank Statement. Further, it appears that the amounts received in cash against, services rendered by them are apparently not deposited in the Service Tax Appeal No.70349 of 2024 18 noticee's bank account, as the amounts of cash-receipts reflected in the month-wise daily sale sheets resumed at the time of search are much higher than the amount deposited in noticee's bank account No. 706801010050125 maintained in Union Bank of India Also, it appears that the amount received in the noticee's bank account No. 706801010050125 maintained in Union Bank of India bank through credit payment viz. POS, NEFT etc., are much higher than the amount of credit receipt reflected in month-wise daily sale sheets and bill book receipt Considering variation in gross receipts reflected in bill receipts, month-wise daily sale sheet resumed, bank statements through various modes, ITR return and gross receipt amount shown in ST-3 returns, it appears that the gross cash and credit receipts reflected in the month-wise daily sale sheet resumed during search and Bank statements respectively appears to be considerations received by the noticee for proving taxable service, and have thus been taken as taxable value for calculating service tax liability of the noticee.
6.5 Further, it appears that during the period from September 2015 to June 2017, the noticee has shown deposit of cash of Rs.1,25,000/- only in their bank current account, however as per month-wise daily sale sheets resumed during search proceedings, as discussed above, the amount of cash receipt during the corresponding period is Rs. 1,06,41,456/-. Further, even the cash amount received during the period April 2016 to June 2017 amounting to Rs. 27,50,436/- as per bill receipts issued by the noticee is much higher than the amount of cash deposit of Rs.50,000/- shown in their current bank account No. 706801010050125 during the corresponding period. The month-
wise cash receipt as per Bank Statement, Bill 'receipt books and month-wise daily sheets has been collated/ prepared and is annexed as Annexure-V, and summary of the same is as under :
(Amount-in Rs.) Financial Year Amount received in cash as per Service Tax Appeal No.70349 of 2024 19 Bank Statement Bill receipt Month-wise daily sale sheet 2015-16 75000 Not furnished 3254669 2016-17 50000 2187654 6048600 2017-18 (up to June) 0 562782 1338187 G.TOTAL 125000 1254395 10641456 It is noticed that the cash receipts reflected in the month-wise daily sale receipt sheets resumed during search is much higher than the cash receipts shown in their bill receipt and amount reflected in bank statement. It appears that the noticee have not issued bill receipts against every cash amount received from its customer for provision of taxable service and also have not deposited all the cash received from customers in their bank account. Thus, cash receipts shown in month-wise daily sale receipt shects resumed during search apparently is amount received in cash as consideration for providing taxable services during the period September 2015 to June 2017.
6.6 Further, it is observed that the noticee besides receiving consideration in cash have, also received consideration for provision of taxable service through credit transfer i.e. POS, NEFT, etc. It is observed that there are variation in consideration received through credit transfer in (i) Month-wise daily sale receipt sheet resumed under search proceedings, (ii) amounts received in their current bank account and (ii) amount shown in bill receipt books. The details of consideration received through credit transfer has been collated/ prepared and annexed as Annexure- VI, and a summary of the same is as under:
(Amount in Rs.) Financial Year Amount received through Credit as per Bank Bill receipt Month-wise daily sale receipt Statement book sheet 2015-16 1069005 Not Furnished 957997 2016-17 3258114 669691 2678521 2017-18 (Upto 751924 206161 753421 June) G.TOTAL 5079043 875852 4389939 It is noticed that the consideration received through credit transfer in the account is much higher than the amount shown Service Tax Appeal No.70349 of 2024 20 received trough, credit transfer in their bill receipts book and month-wise daily sale sheet.
The consideration received through credit transfer in the noticee's bank account apparently reflect true receipt amount and has been taken as taxable value for provision of taxable service inasmuch all the amounts received through credit transfer from customers are directly recorded in the noticee's bank statement, which cannot be fabricated and it appears that the noticee have failed to account for all the credit transfer amount received from customers in their bill receipts books and month-wise daily sale sheets.
6.7 In view of above, the considerations received as cash payment and through credit transfer as reflected in month-wise daily sale sheets and bank statements respectively, apparently are the considerations received by the noticee for provision of taxable service, and the said consideration appears to be the taxable value for ascertaining noticee's service tax liability during the period from September 2015 to June 2017, A summary of the same is as under:
(Amount in Rs.) Financial Year Taxable value Cash receipt Credit receipt Total 2015-16 3254669 1069005 4323674 2016-17 6048600 3258114 9306714 April-June 17 1338187 751924 2090111 TOTAL 10641456 5079043 15720499 6.8 Further on scrutiny of ST-3 return filed by the noticee, it appears that the noticee has declared availment of CENVAT credit of Rs. 46,454/- only in their ST-3 return filed for the tax period April 2015 to September 2016. The noticee furnished copies of input service invoices issued during the period from October 2015 to June 2017 involving service tax of Rs.3,77,900/- after initiation of investigation against the noticee However, as the noticee failed to take/avail said CENVAT credit, except for Rs.46,454- in the ST-3 return during the period from April-2015 to June-2017 in terms of Rule 4(7) of the CENVAT Service Tax Appeal No.70349 of 2024 21 Credit Rules, 2004, which entails that the provider of output service shall not take Rule 9 of Cenvat Credit Rules, 2004, the same cannot be adjusted/ appropriated against CENVAT credit after one year of the date of issue of any documents specified in sub-rule (1) of The notice's service tax liability as quantified in succeeding para.
STATUTORY PROVISIONS AND TAXABILITY OF SERVICES RENDERED:
7.1. After introduction of the negative list regime w.e.f. 01.07.2012. the legal provisions pertaining to levy 'of service tax are as follows:
Prior to July 1, 2012, service of beauty parlour/ beauty treatment and health & fitness service Section 65(105)(zq) and 65(105)(zw) of the Finance Act, 1994, and same is reproduced as was taxable under the category of "beauty parlour³ and Health and Fitness Center under under:
"Taxable service means any service provided or to be provided to any person, to any person by a beauty parlour in relation to beauty treatment;"
"Taxable service means any service provided or to be provided to any person, to any person by a. health club and fitness centre in relation to health and fitness services"
"Beauty parlour" and "Health and fitness service" was defined under Section 65(18) and 65(51) of Finance Act 1994 as under:
"""Beauty parlour" means any establishment providing beauty treatment services"
""Health and fitness service" means service for physical well-being such as, sauna and steam bath, Turkish bath, solarium, spas, reducing or slimming saloon, gymnasium, yoga, meditation, massage or any other like service"
With effect from 01.07.2012 the taxability of services shifted to negative list based taxation regime wherein, "Service" and "taxable Service has been defined under Service Tax Appeal No.70349 of 2024 22 Section 65B (44) and 65B (51) respectively of Finance Act, 1994.
"Service" as per Section 65B (44) ibid interalia means any activity carried out by a person for another for consideration. As the noticee, as discussed above have received consideration for carrying out some activity viz. Beauty parlour and health fitness service, the said activity falls within the definition of "service" as defined in rendering Section 65B (44) ibid.
"Taxable service" as per. Section 65B (51) ibid means any service on which service tax is leviable under section 66B ibid In terms of Section 66B of the Finance Act, 1994 (as amended by Finance Act, 2012) Service Tax is to be levied at the rate of twelve per cent (Service Tax @ 14% w.e.f 01.06.2015) on the value of all Services, other than those service specified in the negative list.
The service i.e. ""beauty parlour and "Health and Fitness Center" as apparently being provided is neither notified under Negative List nor covered by any exemption Notification, hence, the noticee was liable to pay service tax at the appropriate rate on consideration received for. providing taxable service.
8. QUANTIFICATION.
8.1 n terms of section 66B of the Finance Act, 1994, service tax is leviable:
a. At the rate of 14% during 01.06.2015 to June 2017; b. Swatch Bharat Cess @ 0.5% during 15.11.2015 to June 2017;
c. Krishi Kalyan Cess @ 0.5% from 01.06.2016 to June 2017 8.2 The under-mentioned documents were taken into consideration for quantification of service tax liabilitv of the noticee during 2015-16 to 2017-18 (upto June 2017).
(a) Bank Statement for the period from September 2015 to June 2017 Service Tax Appeal No.70349 of 2024 23
(b) Month-wise daily sale sheets of noticee for the period resumed premises of M/s RDS Hospitality Pvt. Ltd. on 08.12.2017
(c) Bill receipt books for period April 2016 to June 2017
(d) S. Tax returns for the period 2015-16 to June 2017 8.3 On examination of Bank Statement and month-wise daily sale sheet for the period September 15 to 2017-18 (up to June), and S. Tax amount paid as per ST-3 return, the detail of Gross receipt/ taxable value, S.Tax Payable, S. Tax Paid and S. Tax short paid during the period September 2015 to June 2017, has been computed and has been summarized below:
(Amount in Rs.) Year Gross Service Tax payable Tax S.Tax receipt/ Paid short Taxable S.Tax S.B.Cess K.K.Cess Total paid Value Tax 2015-16 1055411 147758 0 0 147758 0 147758 (June-
14.11.15) @14% 2015-16 3268263 457557 16341 0 473898 44852 429046 (5.11.15-
March
16) @14.5% 2016-17 1716967 240375 8585 0 248960 0 248960 (Apr-
May) @14.5% 2016-17 7589747 1062565 37949 37949 1138462 0 1138462 (June-
Mar) @15% 2017-18 2090111 292616 10451 10451 313517 0 313517 (up to June 17) TOTAL 15720499 2200870 73325 48399 2322595 44852 2277743
8.4 The noticee has not filed the periodical ST-3 return for the period October 2016 to March 2017 and April 2017 to June 2017 even after initiation of investigation by DGGI. Thus, the noticee have contravened the provisions of section 70 of the Finance Act, 1994 read with Rule 7 of Service Tax Rules, 1994 in not filing the periodical ST-3 returns on the due dates.
7. CONTRAVENTION OF STATUTORY PROVISIONS:
Service Tax Appeal No.70349 of 2024 24 From the foregoing acts of omission and commission by the noticee, it appears that the following provisions of the Service Tax laws have been violated by them.
(i) As per Section 68 of the Act read with Rule 6 (1) of the Service Tax Rules, 1994 every person providing taxable service to any person shall pay Service Tax at the rate specified in section 66B in such manner and within such period as prescribed. Under Rule 6 (1) the Service Tax Rules, 1994, the Service Tax shall be paid to the credit of the Central Government by the 6th/5th (as applicable) of the month immediately following the quarter (in case of individual firm) in which service is deemed to be provided as per the rules framed in this regard.
Although the noticee provided taxable services during the material period and received payments they did not pay appropriate Service Tax thereto and thereby appear to have contravened provisions of Section 68 of the Finance Act, 1994 read with Rule 6(1) of the Service Tax Rules, 1994.
(ii) As per Section 75 of the Act, every person, liable to pay Service Tax in accordance with provision of Section 68 or Rules made thereunder, who fails to credit the Tax or any part thereof to the account of Central Government within the prescribed period, shall pay simple interest at the specified rate for the period by which such crediting of Tax or any part thereof is delayed.
(iii) The noticee also appear to have contravened the provisions of Section 119 of the Finance Act, 2015 (Chapter VI) and Section 161 of the Finance Act, 2016 in as much as they have not paid Swachh Bharat cess and Krishi Kalyan Cess.
(iv) Section 70 of the Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994 inasmuch as they failed to properly self-assess the tax due on the Service Tax Appeal No.70349 of 2024 25 taxable services and file periodical returns within the prescribed time limits and with details of the value of services rendered by them;
8. APPLICABILITY OF EXTENDED PERIOD OF LIMITATION AND MANDATORY PENALTY:
8.1 The noticee was duly registered with the department prior to the date initiation of investigation and they were apparently aware of the provisions of the Act and rules made there under.
In the era of self-assessment, the noticee should have assessed their Service Tax liability properly; paid the tax by the appointed date for the period from September 2015 to 2017-18 (up to June'17). The noticee did not pay the Service Tax including cesses payable on the taxable service provided by them, apparently indicating their mala-fide intent to evade payment of Service Tax.
8.2. The above facts apparently indicate wilful act of omission and commission on the part of the noticee inasmuch as :
They had issued bill receipts indicating charging of taxable consideration for provision of taxable service but no service tax thereon has been paid.
Balance sheets and Income Tax returns reflects revenue/ income on account of provision of taxable service but no service tax thereon has been paid.
Month-wise daily sale sheets indicate receipt of taxable consideration in cash and through credit transfer but no service tax thereon has been paid.
Bank Statement reflects taxable receipt of amount apparently for provision of taxable service but no service tax thereon has been paid.
The noticee failed to declare above true facts about provision of taxable services, taxable value and service tax liability in the ST-3 returns filed by them for the period April 2015 to September 2016 and even for the rest of the period, they had not filed any ST-3 return, which is too in Service Tax Appeal No.70349 of 2024 26 the era of self assessment, where Government have posed enormous faith on the Assessee.
By not filing of statutory ST-3 returns for the October 2016 to June 2017 they deliberately tried not to disclose facts about provision of taxable service, taxable value and service tax liability.
It was only after initiation of investigation by DGGI, willful suppression of material facts from the Department with an apparent intent to evade payment of Service Tax, during the impugned period came to notice. In fact had the officers of DGGI not initiated the investigation of the case, the above illegal activity of the noticee would have remained undetected and payment of due Service Tax including all cesses to the tune of Rs.22,77,743/- might have skipped 8.2.1 From the above facts and analysis in the investigation, suppression of facts by the noticee with an apparent intent to evade payment of Service Tax appears to be apparent. Further, it was the statutory responsibility of noticee to determine and assess Service Tax liability properly and pay it by due date.
However, it appears from foregoing facts/ discussion that the noticee has failed to discharge their statutory obligation in the instant case inasmuch as they have not correctly determined and assessed their Service Tax liability during the relevant period. Accordingly, the extended period of limitation, as stipulated in proviso to section 73(1) of the Act appears to be rightly invocable for demand of Service Tax including SBC and KKC (up to June'`1 7) along with appropriate interest as applicable under section 75 ibid aggregating to Rs.22,77,743/- only, during the period from September 2015 to 2017-18.
8.3 In view of apparent existence of willful suppression/ mis- statement of facts with intent to evade payment of service tax in. view of above quoted provision of law, the noticee appears liable for mandatory penalty under Section 78 of Finance Act, 1994.
Service Tax Appeal No.70349 of 2024 27 8.4 The noticee apparently did not pay service tax, including Swachh Bharat Cess and Krishi Kalyan Cess amounting to Rs.22,77,743/- only for the period from September 2015 to 2017-18 (up to June'l7) on their service consideration towards provision of taxable service by way of contravention of Sections 68, & 70 of the Finance Act, 1994 as amended read with the provisions of Rules 6 & 7 of Service Tax Rules, 1994 as amended
9. Summary of Investigation On examination of documents namely, Bank Statement for the period from September 2015 to June 2017 , Month-wise daily sale sheets of noticee for the period resumed premises of M/s RDS Hospitality Pvt. Ltd. on 08.12.2017, Bill receipt books for the period April 2016 to June 2017 and Service Tax returns for the period 2015-16 to June 2017, it appears that the noticee was engaged in providing taxable Service to its customers/clients but the amount of service tax charged/ collected were not deposited to the government exchequer. Further the noticee in the ST-3 returns filed by them had mis-stated and suppressed the taxable value with the intent to evade payment of service tax. The scrutiny of documents revealed evasion of service tax amounting to Rs. 22,77,743/- against the taxable services rendered by them during the period from September 2015 to June 2017. Also the CENVAT Credit other than Rs. 46,454/- reflected in their ST- 3 return is not admissible as the documents furnished later on are not valid documents for taking CENVAT Credit as they failed to take the CENVAT Credit against them within the prescribed time limit."
4.5 From the perusal of the above it s evident that the case against the appellant is based on comparison of the receipts against the provision of taxable services through cash and by way of credit in their account electronically, with the amounts reflected in the ST-3 returns for the period in dispute. Except for Month-wise daily sale sheet printout, which was resumed by the officers during the search of the premises of RDS Hospitality Pvt. Ltd. in the presence of Shri Gufran Khan who is one of the Directors in RDS Hospitality Pvt. Ltd. and is also the Proprietor of Service Tax Appeal No.70349 of 2024 28 appellant all other documents were provided by the appellant (Shri Gufran Khan) during the course of investigation on the summons issued to him. Even at the time of search of premises of M/s RDS Hospitality Pvt. Ltd., Shri Gufran Khan was present in that premises and he in his statement dated 08.12.2017 recorded on the spot at the time of search admitted the fact of resumption/ recovery of the same and also informed that these pertain to the Appellant. (Shri Gufran Khan is Proprietor of the Appellant). It is totally absurd on the appellant to claim, that Shri Gufran Khan is uneducated and not aware of law etc. Shri Gufran Khan having DIN 03381886 has been Director in M/s RDS Hospitality Pvt. Ltd. a private limited company incorporated on Feb 10, 2011. The second statement which has been relied upon in the show cause notice is the statement dated 11.02.2017 wherein he has again admitted to recovery of the document as above during search on 08.02.2017.
4.6 Further the fact that appellant was issuing invoices/ bills showing service tax (including cess) from its client (service recipients) is established from the Bill Book provided by the appellant during the course of investigation. Though appellant was collecting the service tax (including cesses) from his clients but was not depositing the same with the exchequer is evident from the ST-3 returns filed. Appellant has for some of the period not even filed the ST-3 returns and for the period during which they have filed the ST-3 return i.e. April 15 to September 2016 they have grossly under declared the Gross Receipts and service tax payable. In fact in the returns filed for April 15 to September 15 and April 16 to September 16 they have declared Gross Receipts as „nil‟, and have also paid „nil‟ service tax. During the period Oct 15 to March 16 they declared gross receipt as Rs 3,20,368/-. As per the Bill Receipt Book, appellant had received during the period April 16 to March 2017 a total amount of Rs 28,57,345/- and against this receipt have declared total receipts amounting to „nil‟ in ST-3 return of corresponding period. Similarly for the period April 2017 to June 2017, the Bill Book Service Tax Appeal No.70349 of 2024 29 showed receipt of Rs 7,68,943/- and for this period appellant has not filed any ST-3 return.
4.7 From the Bill Book produced by the appellant during the course of investigation it is evident that appellant was receiving huge amount in cash and some amount by way of credit in their bank account electronically for provision of the services. It was also evident that appellant Bill Book entries when compared with the bank statement varied substantially in respect of the credit amounts received electronically in the bank account. This established that the appellant was receiving amounts against provision of the services for which he was not even raising any bills also.
4.8 The show cause notice has in great depth analyzed the various documents submitted by the appellant during the course of investigation and have concluded how the appellant was manipulating and suppressing the receipts in the statutory documents namely Balance Sheet and Income Tax Return (ITR) also.
4.9 The fact that appellant was receiving a huge amount against the provision of services from his clients in cash and was not depositing these cash receipts in his bank account is also evident from the documents resumed during investigation. To ascertain the total cash receipts against the provision of the services the "month wise daily sale sheet" resumed at time of search has been used. The proprietor of the appellant has in his statement dated 08.12.2017 admitted the factum of recovery of the same during the search at premises in the name M/s RDS Hospitality Pvt. Ltd. and have also informed that these pertained to the appellant firm in which is his proprietorship concern. The fact of recovery of the same was again and that it was in respect of the appellant only was again confirmed by the proprietor in his statement recorded on 11.12.2017.
4.10 It is settled principle in law that the admitted facts need not be established. Hon‟ble Supreme Court has in case of Service Tax Appeal No.70349 of 2024 30 System and Components Pvt. Ltd. [2004 (165) E.L.T. 136 (S.C.)] held as follows:
"6 .....Once it is an admitted position by the party itself, that these are parts of a Chilling Plant and the concerned party does not even dispute that they have no independent use there is no need for the Department to prove the same. It is a basic and settled law that what is admitted need not be proved. .."
4.11 Appellant has from the time of initiation of proceedings have taken a stand that his Chartered Accountant has fraudulently filed returns suppressing the gross receipt. For the fraud committed by the C A he has filed an FIR and also complaint with the ICAI. I observe that this submission is itself enough, to hold that appellant ST-3 returns were filed by suppressing the gross receipts/ taxable value of services provided with the intent to evade payment of service tax. It is act of commission of fraud, suppression with intent to evade payment of tax which is material for invoking the extended period of limitation as per proviso to Section 73 (1) and not the person who has committed the said act of fraud or suppression. The Hon‟ble Apex Court in the case of Aafloat Textiles (I) Pvt. Ltd. [2009 (235) E.L.T. 587 (S.C.)], in Para 11 thereof, has held as follows:
"11. "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which Service Tax Appeal No.70349 of 2024 31 the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. (See Ram Chandra Singh v. Savitri Devi and Ors. [2003 (8) SCC 319]."
4.12 As I find that appellant has suppressed the value of the taxable services rendered with the intention to evade payment of service tax and extended period of limitation is invokable for making the demand, the imposition of penalty under Section 78, is justified in view of the decision of the Hon‟ble Apex Court in the case of Rajasthan Spinning and Weaving Mills Ltd. [2009 (238) ELT 3 (SC)].
4.13 As appellant has failed to assess the correct service tax liability and deposit the same I find that penalty under Section 77 (2) has been rightly imposed upon the appellant.
4.14 Thus I do not find any merits in this appeal.
5.1 Appeal is dismissed.
(Order pronounced in open court on- 14 October, 2025) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp