P.S. Bajaj, Judicial Member.-This appeal has been filed by the appellants against the impugned order dated 1-10-1999 passed by the Commissioner of Central Excise, Jaipur vide which, he had confirmed the demand of service tax of Rs. 9,11,414 and also imposed interest, penalties under sections 75 to 77 of Chapter V of the Finance Act, 1994.

2. The facts leading to the filing of the present appeal may briefly be stated as under :-

The appellants were engaged in providing consulting engineering services. They were registered with the central excise department under section 69 of the Finance Act (hereinafter referred to as ‘the Act’). On inquiry carried out by the officers of Central Excise, it was revealed that they had been providing consulting engineering service to the Command Area Development (CAD), Bikaner during the period 7-7-1997 to 31-3-1999 on which, the total amount of service tax payable by them was Rs. 9,11,414. But they failed to deposit this amount in time. They however, deposited only Rs. 7,11,191 on 24-2-1999 and furnished ST-3 returns for the quarters ending September, 1997, December, 1997, March, 1998 and June, 1998. They wilfully suppressed the fact of providing service to the abovesaid department with intent to evade the service tax. They were, accordingly, issued show-cause notice vide which they were called upon to show cause as to why the service tax amount of Rs. 9,11,417 be not recovered from them and penalty under sections 76, 77 and 78 of the Act be not imposed on them.

3. The appellants, however, contested the correctness of the abovesaid show-cause notice. They alleged that the service tax amount of Rs. 7,39,581 was received by them from the CAD only on 10-2-1999 and 24-2-1999 for the period July, 1997 to June, 1998 and they deposited the same on 24-2-1999. They also averred that there had been no suppression of the facts regarding providing of service to the CAD. They denied their liability in toto for payment of service tax, interest thereon and penalties. The Commissioner, however, did not agree with their version and confirmed the service tax demand and also imposed interest and penalties on them as detailed in the impugned order itself.

4. The ld. counsel for the appellants has contended that the deduction of reimbursable expenses from the gross amount has not been allowed to the appellant illegally in terms of the Circular No. 43/5/97-TRU, dated 2-7-1997 issued by the Ministry and that there was no material on record to suggest suppression of facts by them from the department. The counsel has also contended that no penalty under sections 76, 77 and 78 of the Act could be legally imposed on the appellants. Therefore, the impugned order of the Commissioner deserves to be set aside.

5. On the other hand Ld. SDR has reiterated the correctness of the impugned order of the Commissioner and argued that on account of failure on the part of the appellants to deposit the service tax in time, the penalties under sections 75 to 78 have rightly been imposed on them and that there had also been suppression of facts on the part of appellants in respect of the services rendered by them to the CAD.

6. We have heard Shri K.K. Anand, Advocate for the appellants and Shri Mewa Singh, SDR for the revenue and have gone through the record.

7. A bare perusal of the impugned order of the Commissioner shows that the consulting engineering services provided by the appellants to the CAD, Bikaner, during the period in question, from 7-7-1997 to 31-3-1999, were of Rs. 39,07,845 and the service tax payable on that amount was Rs. 9,11,414. The appellants, out of this total amount of service tax had however, deposited Rs. 7,11,199 leaving the balance amount of Rs. 2,00,215 as unpaid.

8. The liability to pay service tax on the part of the appellant has not been disputed before us. The contention of the counsel that the reimbursement expenses on account of transportation, communication, stationery, computer consumption, reports, equi