B. Ravichandran ORDER
B. Ravichandran, Member (T)
1. The appeal is against the order dated 1.4.2011 of Commissioner of Central Excise, Jaipur-I. The appellants are engaged in providing services under the category of 'security agency' covered by tax entry section 65(105)(w). Proceedings were initiated against them for non payment of service tax on the consideration received for rendering the said services. The period involved is November, 2004 to September, 2009. The original authority confirmed the service tax liability of Rs. 64,80,971/- on the appellant. He also imposed the penalty of equivalent amount under section 78 of the Finance Act, 1994 along with penalties under section 76 and 77 of the said Act.
2. Learned Counsel appearing for the appellant submitted that they are registered as a society and are governed by the Government regulations. They are mainly involved in resettlement of ex-serviceman and activities relating to their welfare. They are not involved in commercial activities and cannot be considered as 'commercial concern'. Even after amendment of tax entry in 2006, service tax liability will not arise for them as they are not involved in providing any taxable service. Learned Counsel also submitted that their assessee is run by retired service personnel and there can be no allegation of fraud, collusion etc. invoking extended period of demand as well as imposing penalties under various sections. He prays for setting aside the penalties invoking provisions of section 80 of the Finance Act, 1994. He also submitted that they have provided these services mainly to various Government departments, corporations and RBI and they did not get the Service Tax duly reimbursed by all these organisations which created financial difficulties for the appellant. Hence, the additional burden of penalty may please be waived.
3. Learned AR submitted that bylaws of the appellant society, as submitted by them in appeal, clearly state that they are operating on commercial/profit basis and there were specific regulations regarding allocation of profit for the functioning of the society. Further, it is submitted that valuation for service tax purpose is to be the gross amount received from the recipient of service and appellant failed to pay service tax on such gross amount.
4. Regarding the demand of extended period, the learned AR submitted that it is clear from the impugned order (para 9 and 13) that the appellants did not submit even the basic documents inspite of repeated requests by the department. The revenue had to proceed with the case after collecting details from similarly placed society. The appellant plea of absence of ingredients for invoking the extended period for demand cannot be accepted. The details are brought out clearly in the impugned order.
5. We have heard both the sides and perused the appeals records.
6. Regarding the liability of the appellant for Service Tax under the category of security agency, it is clear that the services rendered are squarely covered by the tax entry and we see no merits in the pleas of the appellant in this regard. The lower authority examined the issue in detail and we find no ground in the present appeal to interfere with the findings. Similarly, the appellants are covered for tax liability for the whole period of demand is clear from their legal status and financial accounts to the effect that they are, infact, involved in profitable commercial activity. It is clear from the bylaws of the society which clearly stipulates about net profit. We find no justification to hold the appellant as anything other than commercial ........