Service Tax of over Rs 30 Crores collected, not paid to Department - MD arrested
THE Pune-III Central Excise and Service Tax Commissionerate recently detected a case of huge evasion of Service Tax by a Company belonging to a high-flying liquor Group now almost grounded. This Firm is alleged to have evaded Service Tax to the tune of Rs. 35.31 Crores. Out of this, the Firm is said to have collected Rs. 30.76 Crores from their clients, which they used in their business instead of depositing with the Government. The 58 year old Managing Director of the Company has been arrested by the Central Excise sleuths. This is the second case of arrest under Service Tax by the Pune III CE&ST Commissionerate. Assistant Commissioner V. Mangaraju says that this case reinforces the Department's intention to take stringent action against willful tax offenders while extending full co-operation to honest taxpayers.
While the Department calls it evasion, the Company Counsel says that it is a case of default there was a delay in payment of Service Tax due to economic slowdown. It is alleged that the MD was called to the Service Tax Office to record his Statement and he was arrested. It seems the Department is now approaching the clients of the Company to make payments directly to the Department, which they say, is damaging the reputation of the Company.
There was a report of another arrest in Delhi that of the MD of Telecom Co.