By TIOL News Service

NEW DELHI, OCT 09, 2015: WITH the New DG taking over the DGCEI, the sleepy intelligence agency seems to be roaring back into action. Within a space of 24 hours the Bangalore and the Pune Units have arrested two mega assessees for collecting huge amount of service tax but not depositing the same in the Government Accounts.

As per the official Press Release, the Bangalore Unit arrested the MD of one real estate company providing Works Contract Service, which had collected Service Tax to the tune of Rs.3.24 Crores and not remitted the same to the Government Account. On receiving intelligence, the agency initiated a proper investigation and certain incriminating documents were recovered. It was found that the service provider, who was engaged in providing taxable services i.e., Construction of Commercial and Residential complexes/buildings on works contract basis, had failed to pay the Service Tax of Rs. 3.24 Crores for the period 2010-11 to 2015-16 on the services so provided. It was also found that the service provider had collected Service Tax from his customers/clients. The Company has failed to file the statutory Service Tax returns, in addition to evading payment of tax. The tax dues, including interest recoverable is around Rs.5 Crores.

In a similar case, the Pune Unit of the agency arrested the proprietor of M/s. Kaka Motors, for the alleged evasion of service tax dues since he had collected more than Rs Four crore of Service Tax against services provided by them but did not deposit this amount with the exchequer.

The assessees are engaged in providing services in the nature of transportation of chassis manufactured by M/s. Tata Motors Ltd., Pune to the units of Tata Motors in Jamshedpur and Lucknow and to M/s. TML Distribution Co. Ltd. Investigations by DGCEI uncovered that the assessee had suppressed their actual service tax liability in their periodical returns to the Government and also did not deposit the service tax dues with the Govt. exchequer. After detection of evasion, the assessee paid up only Rs. 35 lakh but has been defaulting on paying the remaining amount of Rs. 4.04 crore to the Government exchequer. Since the Finance Act, 1994 empowers officers to arrest any person evading service tax of Rs. 50 lakh and above, the assessee was arrested. He was produced before the CJM, Pune and was remanded to the Judicial Custody till 21.10.2015.