Tax Deductors Who Default In Depositing TDS by Due Date Shall be Liable for Prosecution: CBDT
CBDT in a Press Release cautions:
It has come to the notice of Income Tax Department that many times the tax deductors, after deducting TDS from specified payments, are deliberately not depositing the taxes so deducted in Government account and continue to deploy the funds so retained for business purposes or for personal use. Such retention of Government dues beyond the due date is an offence liable for prosecution under Section 276B of the Income Tax Act, 1961. The defaulter, if convicted, can be sentenced to Rigorous Imprisonment (RI) for a term which can extend upto seven years.
Appellant discharging ST on Cargo Handling charges and in respect of Transportation charges they are paying ST as recipient of service - in such a situation, there is no cause for payment of ST on whole amount under one Taxable service of Cargo Handling
THE appellants are running a Container Freight Station (CFS) at Navi Mumbai. They are registered with the department for the taxable service of ‘Storage & Warehousing' and ‘Cargo Handling Services'. In relation to handling of containers, they are charging handling charges as also transportation charges from the customers and these are shown separately in the invoices. On the handling charges, they are discharging service tax under the category of ‘Cargo Handling Services' whereas on transportation charges, they have discharged Service Tax under GTA services.
The department was of the view that the entire transaction should be treated as one and on the whole amount received, the appellant should discharge Service Tax liability under Cargo Handling Services and accordingly, issued a Service Tax demand of Rs.57,52,077/- for the services rendered during 01.05.2005 to 30.07.2006.
The appellant said that these are two separate services and the appellant has discharged the Service Tax liability on them separately and, therefore, the impugned demand is not sustainable.
The CCE, Raigad did not find these pleas worthy enough so he confirmed the demand along with penalty and interest.
Before the CESTAT, the appellant made the following submissions -
+ there are two transactions involved; one is with respect to handling of containers undertaken by the appellant, on which Service Tax liability has been discharged under the category of ‘Cargo Handling Service' and the other relates to movement of the container from CFS to the Port and vice-versa for which they have engaged a transporter; that the said service of movement of container is covered under GTA services and as a recipient of the service, they have discharged Service Tax liability on the freight paid by them.
+ Since the transactions involved are distinct and different and Service Tax liability has been discharged in accordance with law, the question of treating both transactions as one is not sustainable and accordingly the appeal be allowed.
The Bench observed -
"6. The CBE & C vide Circular no. B-11/1/2002-TRU dated 1.8.2002, inter alia, clarified that in case where the Cargo Handling Service and transportation services are rendered, and if in the bills raised for the services rendered, transportation is shown separately (on actual basis, verifiable by documentary evidence), the tax would be leviable only on the Cargo Handling Charges. This clarification issued by the Board applies even to the facts of the present appeal. Since the appellant has discharged the Service Tax liability on both these services, the question of leviability of Service Tax on whole amount under one taxable service of Cargo Handling is not sustainable in law."
The appeal was accordingly allowed.