Tax evasion arrest in Durgapur – mining company owner held


Arrested A private mining company owner has been arrested in Durgapur on January 30 for evading taxes in excess of INR 2.5 crores. A team of Central Excise officials arrested the owner from his office at Ispat Pally of Bidhannagar locality in Durgapur.

The company engaged by the national coal major Eastern Coalfields Limited (ECL) as an outsourcing partner was tracked down by the Anti-Evasion Wing of Excise department’s Durgapur 1 division.

According to the Commissioner, Central Excise & Service Tax, Mr D C Dwivedi: “The accused had declared the company’s service tax liability worth Rs 1.79 crore under Voluntary Compliance Encouragement Scheme (VCES)’ 2013 and was supposed to pay half of the amount by the end of December 2013, which he failed to pay.”


According to sources, this became the grounds for the arrest of the firm’s owner.

VCES, which ended on December 31, was introduced by Finance Minister P Chidambaram for service tax defaulters to pay dues without any penalty or late payment charges.

Defaulters were given a chance to declare tax liabilities, including cess charges, for the period October 1, 2007, to December 31, 2012, and clear the same. The declarants were mandated to pay not less than 50 per cent of their tax dues on or before December 31, 2013, and the rest of the liability by June 30 of this year.

The Anti-Evasion Wing of the Durgapur-1 division comprising two inspectors and one superintendent Mr Basudev Dutta under deputy commissioner, Mr Hitesh Godara was engaged the investigation of the case. The office premises of the defaulter company at Bidhannagar locality were raided on Thursday.

Mr Dwivedi said: “The investigation revealed that the service provider had even failed to deposit service tax amount worth Rs 1.08 crore that the company already had already realised from ECL for the subsequent period, which appeared to be a gross violation.”

Central Excise team collected and corroborated the information of service tax evasion from ECL officials.

Service tax evasion of Rs 50 lakh and above has now been made a cognisable offence following the passage of the 2013-14 Finance Bill on May 10 last year. Earlier, officials did not have any powers to arrest offenders for service tax evasion.

Finance Minister P Chidambaram has proposed provisions of Criminal Procedure Code (CrPC) to arrest such offenders in 2013-14 budget, in line with customs and central excise laws.

This is the first of its kind of arrest in not only Durgapur but in the entire district where a person has been arrested due to service tax evasion.

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