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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, VICE-PRESIDENT
K. Gopalakrishnan -Appellant
Versus
Commissioner of Central Excise, Chennai -Respondent
FINAL ORDER NO. 949 OF 2010 APPEAL NO. ST/292 OF 2009
Decided On : 03-09-2010
V. Parthasarathy,C. Dhanasekaran
1. Heard both sides on the appeal against the Order-in-Revision under section 84 of the Finance Act, 1994 passed by the Commissioner of Service Tax, imposing a penalty of Rs. 2 lakhs on the assessee, a proprietary concern of Shri K. Gopalakrishnan, engaged in providing ‘mandap keeping service’ on the ground of deliberate non-inclusion of amenity charges in the assessable value of mandap keeping service, for the purpose of computing service tax liability.
2. The profit and loss account of the assessee was prepared on the basis of ledger account maintained under the heading ‘Amenities Charges’ and Income-tax was also paid on the said income. However, in spite of the above, the assessee claimed that the amenities charges did not belong to his business but to his son. However, no evidence was produced in support of the claim and further, the account specifically shows that the amenities were provided by the assessee. The fixed asset schedule of income-tax return filed by the assessee shows that the furniture and vessels (amenities) are owned by the assessee of which depreciation was claimed and electricity charges was shown as expenditure in the expenditure account, thus, clearly establishing that the amenities charges were collected by the assessees in connection with the mandap keeping service. The plea of the assessee that he was ignorant of his liability by inclusion of the amenity charges in the schedule of the services of mandap keeping cannot be accepted as he was well aware of benefits under Direct Taxes (depreciation under the Income-tax Act). The assessees have also not shown that they were under a bona fide belief for non-payment of service tax. Since the ST-3 return did not show the amenities charges and since the plea of ignorance of law cannot be accepted for the reason set out above, I agree with the finding of the revision authority that charge of suppression of taxable value with intent to evade payment of service tax is proved and the assessees have not shown any reasonable cause as required under section 80 of the Finance Act, 1994. I, therefore, uphold the impugned order and reject the appeal.
