PNG Detective & Security Pvt. Ltd. Vs Commissioner (CESTAT Delhi)
In PNG Detective & Security Pvt. Ltd. Vs Commissioner, the CESTAT Delhi upheld the confirmation of service tax demand amounting to Rs.1,97,00,328/- under Section 73(2) of the Finance Act, 1994, along with interest and equivalent penalty. A separate penalty of Rs.10,000/- under Section 77 was also imposed. However, the Tribunal granted the benefit of cum-tax valuation and remanded the matter to the original authority solely for recalculation of tax and penalty on that basis.
The appellant was registered under “security agency services.” Based on intelligence, the Department alleged that service tax had not been paid on the full value of taxable services and that the appellant was also providing “Manpower Supply Agency” services without proper registration. After investigation, a show cause notice was issued and adjudicated. The matter was earlier remanded by the Tribunal in 2016 for fresh adjudication in the interest of natural justice. Upon remand, the Commissioner again confirmed the demand, leading to the present appeal.
The appellant argued that deposits reflected in bank accounts included re-deposits of unspent cash, bounced cheques, loans, fund transfers, salary payments, bonus, ESI, EPF contributions, and sale of goods, and therefore could not be treated as taxable receipts. It was contended that only service charges were liable to service tax and that the impugned order was non-speaking and failed to consider detailed submissions. The appellant also claimed that the demand was time-barred, as they were registered and filing returns.
