The central excise and service tax commissionerate on Wednesday arrested a construction contractor for evading service tax of Rs 1.22 crore.

The accused, Parshuram Chalwadi (28) of Tingrenagar, is the director of M/s Om Chalwadi Constructions Private Limited, located on Tadiwala Road. On December 3, a civil engineer in Nigdi was arrested for evading service tax of Rs 75 lakh.

B K Thapliyal, superintendent of central excise and service tax, arrested Chalwadi under section 91 (1) of the Finance Act. Chalwadi was produced at a magisterial court and sent in judicial custody for 14 days.

Chalwadi recorded his statement on December 9 and 10 admitting that he collected service tax worth Rs 1,22,44,469 from his customers, but he failed to credit the same in the account of the Union government. Chalwadi had used the money for business purpose. Chalwadi filed a bail plea through his lawyer.

Chief judicial magistrate N T Ghadge granted bail to the contractor on the condition that he will make himself available whenever he was called for questioning.

The court took an undertaking from Chalwadi that he will pay the service tax by March 31, 2014 or else his bail will be cancelled.

On December 3, Nitish Pandit, the proprietor of M/s Creative Construction in Nigdi, was arrested for allegedly evading service tax of Rs 75 lakh. Pandit had collected the tax amount from his customers five years ago, but did not deposit it with the service tax department. He is out on bail.