Custom, Excise & Service Tax Tribunal
M/S New Industrial Security Services vs Commissioners Of Central Excise, ... on 14 October, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad -ooOoo- Appeal No. : ST/61,62/2007 [ Arising out of OIO-21/MP/2006 dtd 30/11/2006 passed by Commissioners of Central Excise, Customs and Service Tax-SURAT-I ] 1. M/s New Industrial Security Services - Appellant(s) 2. M/s New Industrial Security Services (M) Vs Commissioners of Central Excise, Customs and Service Tax-SURAT-I - Respondent (s)
Represented by For Assessee : Shri S Suriyanarayanan, Advocate For Revenue : Shri L Patra, Authorised Representative For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 14/10/2015 ORDER No. A/11662-11663/2015 dtd 14/10/2015 Per : Mr.P.K. Das, These appeals are arising out of a common order and therefore, both are taken up together for disposal.
2. The relevant facts of the case in brief are that M/s New Industrial Security Service (M) [in short NISS(M)] and M/s New Industrial Security Service [in short NISS] situated in the same premises are providing Security Services covered under the Service Tax net. On 11.3.2004, the Central Excise Officers visited the appellants premises and found that the appellant rendered the services as Security Agency Services as defined under Section 65 of the Finance Act 1994 and they have not paid the Service Tax.
3. A Show Cause Notice dtd 29.6.2004 was issued by the Dy. Commissioner of Central Excise and Customs . Div. II proposing demand of Service Tax of Rs 58,47,888/- alongwith interest and to impose penalty on NISS and the demand of Service Tax of Rs 18,94,659/- alongwith interest and to impose penalty on M/s NISS (M). By the Impugned Order, the Commissioner of Central Excise & Service Tax, Surat 1, confirmed the demand of Service Tax of Rs 58,47,888/- and Rs 18,94,659/- alongwith interest and imposed penalty under Section 78 of the Act 1944 and various provisions of the Act 1994 on M/s NISS and M/s NISS(M) respectively.
4. After hearing both the sides and on perusal of record, we find that the Learned Advocate fairly submits that leviability of the Service Tax on Security Agency Services on the appellants is not in dispute. It is submitted that the demand of service tax for the period April 1999 to 11.3.2004 by show cause notice dated 29.6.2004 is hit by limitation. It is also submitted that the quantification of the demand of tax is not proper to the extent the appellants are eligible for cum-tax benefit and the reimbursable expenses such as salary and other expenses would be excluded from the assessable value. He relied upon the decision of the Tribunal as under :
1. CCE&C, Patna vs Advantage Media consultant 2008.10.STR.449 (Tri. Kol.) where cum-tax benefit was allowed.
2. Gujarat Intelligence Security Vs CCE, Vadodara 2010.19.STR.270 (Tri. Ahmd) upheld by the Honble Gujarat High Court in the case of CCE&C, Vadodara vs Gujarat Intelligence Security (India) 2011.24.STR.167(Guj.)
5. On the other hand, the Learned Authorised Representative on behalf of the Revenue submits that the Larger Bench of the Tribunal in the case of Sri Bhagavathy Traders vs CCE, Kochi 2011.24.STR.290 (Tri. LB) held that the reimbursement expenses would not be excluded from the assessable value. He reiterates the findings of the Adjudicating Authority. It is submitted that the appellant had not disclosed the amount even in their balance sheet and therefore, extended period of limitation. He also submits that they have not obtained registration certificate in respect of the Security Agency Services and the extended period of limitation would be invoked.
6. We find that there is no dispute on the leviability of Service Tax under the category of Security Agency Services on both the appellant. The dispute relates to the quantification of the demand of tax. We agree with the submission of Learned Authorised Representative that reimbursement expenses would be included in the assessable value as held by the Larger Bench of Tribunal in the case of Sri Bhagavathy Traders (supra). But, there is a force in the submission of the Learned Advocate that the cum-tax benefit should be extended while determining the demand of duty. The Learned Advocate submits that the appellant submitted the break-up of amount actually received by them, which was not examined by the lower authorities. The Adjudicating Authority observed that during the material period the demand of tax would be determined on the actual receipt of the value of taxable services. It is submitted by the Learned Advocate that they have already prepared the statement on this issue which may be allowed to place before the Adjudicating authority. In our considered view, the appellant should be given an opportunity to place the statement for claiming cum-tax benefit, before the Adjudicating Authority, in the interest of justice.
7. Regarding the demand of tax barred by limitation, we agree with the submission of the Learned Authorised Representative for the Revenue. It is seen that they have themselves admitted that they were showing different amounts in the balance sheet, ledger and books of accounts to avoid payment of tax. The Learned Advocate submits that they have taken registration in respect of the M/s NISS (M). We find that even the appellants were aware the levy of tax and they have not paid the tax and therefore it is a fit case to invoke the extended period of limitation. Hence, the extended period of limitation would be invoked in this case.
8. The Learned Advocate submits that they have paid the entire amount of tax and therefore the imposition of penalty is not warranted. We find that the appellant had not disclosed the amount of the tax to the Dept. They have also not filed return. The Central Excise officers during the visit had detected the non-payment of the tax. So, the imposition of penalty is warranted. However, considering the overall facts and circumstances of the case, in our view, the imposition of penalty under Section 78 of the Finance Act, 1994 is sufficient. We agree with the submission of Learned Advocate that the Adjudicating Authority had not given the option to pay penalty 25% of the tax alongwith the entire amount of tax and interest, within the specified period. So, they are entitled to get such option under Section 78 of the Act 1994.
9. In view of the above, we modify the impugned order in so far as the demand of Service Tax alongwith interest is upheld. The penalty imposed under Section 78 is also upheld and the other penalties are set aside. The Adjudicating authority is directed to determine the demand of tax after extending the cum-tax benefit and the appellant would submit the statement of the amounts actually received by them. The Learned Advocate undertakes to submit the statement within thirty (30) days from the date of receipt of this order. The appellant is entitled to pay penalty 25% of tax alongwith the entire amount of tax and interest within thirty (30) days from the date of communication of the order of the Adjudicating Authority. Both the appeals filed by the appellants are disposed of in the above terms.
(Dictated and pronounced in the Court)
(P.M. Saleem) (P.K. Das)
Member (Technical) Member (Judicial)
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