Daijiworld Media Network - Mangaluru

Mangaluru, Apr 27: On specific intelligence gathered by the officers of the central excise and service tax commissionerate, Mangaluru, a managing director of a firm providing clearing and forwarding services, steamer agency services and custom house agency services has been arrested for service tax evasion of over Rs 1.38 crore, stated a media release from the commissionerate.

However, the identity of the person arrested has not been revealed.

The release stated, "During the detailed investigation carried out by the officers, it has been revealed that the service provider, though had been providing taxable services, failed to discharge the appropriate service tax liability. The service provider has not even been crediting the service tax collected from the customers to the government exchequer. The investigation also revealed that the service provider has not been complying with even the basic provisions of the statute. They have willfully misdeclared the value of taxable services or declared the value as nil inspite of providing taxable services of substantial value. During the investigation, the service provider has admitted to the contraventions and stated that due to financial hardships, they could not discharge their duty liability.

"As the service tax collected but not paid to the exchequer for more than six months exceeded Rs 1 crore, the acts of omission and commission on the part of the service provider constituted an offence under Section 89(1)(d) of the Finance Act, 1994 thereby attracting imprisonment extending to seven years in terms of Section 89(1)(ii) of the said Act. Further, such offences shall be cognizable as per Section 90 of the Finance Act," the commissionerate said.

The service provider was therefore arrested on April 26 under Section 91 of the Finance Act, 1994 and produced before N Sunil Kumar Singh, principal senior civil judge and chief judicial magistrate, Mangaluru who remanded him to judicial custody for 14 days. Further investigation is under progress.

"The commissionerate equipped with data received from various sources has been proactively analysing the data base of various service providers, scrutinizing regularly the returns filed by them to detect contraventions, monitoring payment of service tax mainly by habitually defaulting assessees, investigating contraventions noticed and taking appropriate action against such wrong doers in order to further improve tax compliance in the jurisdiction. Due to initiation of enquiries, a few of such defaulters have discharged their liability during the stages of investigation itself and availed facilities provided in the statute to conclude the proceedings. However, detailed investigations are underway in respect of other defaulters," the release stated.