Service Tax - EBIZ MD gets bail
ON Friday, DDT carried the case of the arrest of EBIZ MD. The bail application of the MD as reported came up for hearing on Friday. The MD is said to be a citizen of Canada holding a Canadian passport but is a resident of India.
The case of the prosecution is that a specific intelligence was received by the DGCEI officers that M/s e-Biz.com Pvt Ltd were selling their e-educational packages to their customers to be accessed online by using login and password, however, in order to enjoy exemption of90% available to tour operators, they rechristened their e-educational package as ‘eBiz Holiday Accommodation Packages'. Both the packages i.e eBiz educational package or eBiz Holiday Accommodation Packages were available at a fixed price of Rs 10,880/- (inclusive of all taxes), however, they were not at all in tour operating business. The investigation revealed that the company had shown more than40% of its business from holiday packages, on which they were taking abatement of 90% under the category of ‘Tour Operator', whereas, they were not providing any service covered under ‘touroperator'. As per the case of the prosecution the service tax collected by the company but not paid/deposited is more than Rs 17 crores.The applicant is stated to be the MD of the company.
The Additional Sessions Judge court observed,
It is an admitted fact that at this stage, the applicant is in custody in this case since 20 01.2016 and his statement u/s 14 of the Central Excise Act, 1944 dated 20.01.2016 has already been recorded The above said company has without prejudice to the rights and contentions has also voluntarily deposited Rs. 17 crores towards the Service Tax (copy of receipts have been filed on record in that regard) i.e has deposited the entire alleged evaded service tax amount of Rs. 17 crores. The issue whether the said company could have claimed the said exemption under the Notification dated 20.06.2012 is under dispute between the parties, however still the said company to show its bona fides has deposited the said alleged evaded amount of Rs 17 crores with the Service Tax department.
The applicant at this stage does not seem to be required for any further investigation and is stated to be in custody in this case since 20.01.2016.
In view of the totality of the facts and circumstances of the case, period of custody, as the applicant does not seem to be required for further inquiry / investigation and the said company has voluntarily deposited the alleged evaded amount of Rs. 17 crores with the Service Tax department, therefore, no fruitful purpose would be served by keeping the applicant in further custody.
The applicant accused Pawan Malhan is thus admitted to bail on furnishing a personal bond in the sum of Rs 1 lakh with one surety of the like amount subject to the following conditions:
(1) That the applicant / accused shall join the inquiry investigation as and when required or directed by the IO,
(2) That the applicant / accused shall as stated by the ld counsel for the applicant deposit his passport with the trial court at the rime of furnishing bail bonds and
(3) That the applicant/ accused shall not leave India without the prior permission of the trial court.
It is heard that DGCEI is now investigating Amazon.com in a 200 crore evasion case.