C.C.E. Panchkula vs M/S. Krishna Cylinders

[Arising out of Order-in-Appeal No. 23/ST/PKL/2008 dated 31.12.2008 by the Commissioner of Central Excise (Appeals), Delhi].

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?

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?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E. Panchkula .Appellants

Vs.

M/s. Krishna Cylinders .Respondent

Appearance:

Shri Govind Dixit, DR for the Appellants

Shri Gagan Kohli, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri R.K. Singh, Member (Technical)

Date of Hearing: 08.01.2015

FINAL ORDER NO. 50096/2015-CU (DB)

Per Ashok Jindal:

The revenue is in appeal against the impugned order wherein penalties under section 76, 77 and 78 of the Finance Act 1994 has been dropped by the Ld. Commissioner (A).

2. The brief facts of the case are that during the course of the audit between the period 30.08.2006 to 31.08.2006, it was revealed that appellant has not paid the service tax during the period 01.04.2006 to 31.03.2007 on outward goods transportation services. On pointing out by the audit team the respondent paid the service tax along with interest. Thereafter, a show cause notice was issued to appropriate the amount already paid by the respondent and for imposition of penalties under section 76, 77 & 78 of the Act. The Adjudication took place and the amount already paid was appropriated against the demand of service tax and interest and various penalties under section 76, 77 & 78 of the Act were confirmed. The said order was appealed by the respondent before the Ld. Commissioner (A) who set aside the penalties under section 76, 77 & 78 of the Act. Aggrieved from the said order revenue is before us.

3. The Ld. AR submits that in this case the demand has been confirmed and admitted by the respondent for the extended period of limitation. Therefore, the respondent cannot escape the penalties under section 76, 77 & 78 of the Act. He drew our attention to the impugned order and submits that in the impugned order, penalties have been waived off by invoking under section 80 of the Finance Act, 1994. In fact, when extended period of limitation has been invoked and liability has been admitted by the respondent, therefore, respondent cannot take the benefit of the section 80 of the Act. He also relied on the decision of Honble Court of Punjab & Haryana in the case of Machino Montel (I) Ltd. reported in 2006 (202) ELT 398 (P&H). To submit that mere deposition of the duty demand before issuance of the show cause notice cannot give the benefit to the assessee for having imposition of penalty.

4. On the other hand the Ld. Counsel appearing on behalf of the respondent submits that in this case the respondent were having bonafide belief and they were not aware of the new provisions which were applicable from 01.01.2005. Therefore, they are entitled for the benefit under section 73(3) of the Finance Act 1994 as they have paid service tax along with interest. Therefore, the show cause notice was not required to be issued to them. In these circumstances, he submits that impugned order requires to be upheld.

5. Heard the parties and considered the submissions.

6. We have gone through the impugned order. In the impugned order the Ld. Commissioner (A) has observed the contentions of the respondent that during the period involved initially the levy of service tax on GTA service was applicable from 01.01.2005 and the respondent were not well aware of the provisions of the service tax rules. Considering this position, the Ld. Commissioner (A) arrived at the decision not to impose penalty under section 76, 77 & 78 of the Act. We have gone through the provisions of the Section 73(3) of the Finance Act 1994 which are reproduced as under:

Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid:

Provided that the Central Excise Officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of one year referred to in sub-section (1) shall be counted from the date of receipt of such information of payment.

7. As per the provisions of the section 73(3) of the Act, the show cause notice is not required to be issued when service tax along with interest has been paid by the assessee before issuance of show cause notice and there is no allegation against the assessee for fraud, collusion, willful misstatement, suppression of facts or having any malafide intention to not to pay any service tax. We have also gone through the show cause notice. In the show cause notice there is no specific allegations against the respondent that respondent had not paid by way of fraud, collusion, willful misstatement or suppress the material facts or was having any malafide intention of not to pay service tax.

8. In these circumstances, we hold that although the Show cause notice was issued to the respondent which was not required to be issued as per section 73(3) of the Act. Therefore, we do not find any infirmity with the impugned order. Accordingly, the same is upheld and appeal filed by the revenue deserves no merit and the same is dismissed.

(Dictated and pronounced in the open court)

(R.K.Singh) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

5

ST/222/2009-CU (DB)