Ammai Construction vs Cce & St, Raipur
- Case No.Appeal No.ST/53935/2014
Ratio decidendi
The rule this decision rests on
Where service tax has been collected from a client but not paid to the Revenue, a plea of ignorance of the obligation to pay, unsupported by any evidence of absence of malafide intent, does not warrant leniency; the collection without payment is taken as evidence of a malafide intent to defraud the Revenue, and the penalties under sections 76, 77 and 78 of the Finance Act, 1994 are therefore sustained. A waiver or reduction of penalty under the Finance Act, 1994 is not available merely because the entire service tax, interest and penalties were paid, where the whole amount of service tax was not paid within thirty days of adjudication; authorities relied upon for reduction on payment are therefore inapplicable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Hearing/Decision: 02.02.2015
(Arsing out of Order-in-Appeal No.42 (ST)/RPR/2014 dt.4.3.14 passed by the CCE(A), Raipur)
For approval and signature:
Honble Mr.Ashok Jindal, Member (Judicial)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
Seen
4 Whether Order is to be circulated to the Departmental authorities? Yes
Ammai Construction Appellant
Vs.
CCE & ST, Raipur Respondent
Present for the Appellant: Ms.Rinki Arora, Advocate
Present for the Respondent: Ms.Ranjana Jha, AR
Coram: Honble Mr.Ashok Jindal, Member (Judicial)
FINAL ORDER NO.50254/2015
PER: ASHOK JINDAL
The appellant is in appeal against the impugned order for waiver of penalty imposed on them under section 76,77 and 78 of Finance Act, 1994.
2. The brief facts of the case are that the appellant is a service provider under the category of maintenance and repair service, erection, commissioning or installation service, commercial or industrial construction and man power recruitment or supply agency services to their client M/s. National Mineral Development Corporation Ltd. During the period from 2006-07 to June, 2011, the appellant collected the service tax from their client but did not pay the same to the department. Therefore, show cause notice was issued to the appellant for demand of service alongwith interest and various penalties under the Finance Act, 1994. The appellant paid some amount before adjudication and some amount after order passed by the first appellate authority. The appellant is not disputing their liability. They are seeking setting aside the penalties imposed on them by way of impugned order.
3. Learned Counsel of the appellant submits that the appellant were located in a remote area where no facilities available like CA and they were not aware how to pay service tax because this, they could not pay service tax in time. Learned Counsel submits that as the entire amount of service tax has been paid by the appellant, the penalties be waived.
4. Learned AR strongly opposes the contention of the learned Counsel and submits that it is not the case that the appellant has not collected service tax. The appellant has collected the service tax but did not pay to the department. It is clear case of fraud where no leniency is to be given to the appellant. Therefore, the impugned order is to be upheld.
5. Heard the party and considered submissions.
6. I find in this case, that the appellant has collected service tax and but did not pay the same to the department and strangely taken defence that they are not aware that the service tax collected from the client is to be paid to the Revenue. This shows that the appellant were having malafide intent to defraud the Revenue by collecting the service tax from the client. In these circumstances, I do not find any infirmity in the impugned order and the appellant is not entitled for any leniency. Therefore, the impugned order is upheld and the appeal filed by the appellant is dismissed.
7. There is also a prayer of appellant that the penalty be reduced. The prayer is not acceptable as the whole amount of service tax has not been paid by the appellant within 30 days of adjudication of the matter. Therefore, the case law relied upon by the appellant is not relevant.
(Pronounced in the open court)
(ASHOK JINDAL)
MEMBER (JUDICIAL)
mk
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