Cce Aurangabad vs Tekcare India Pvt. Ltd

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I

APPEAL No. ST/93/11 ST/CO/14/11

(Arising out of Order-in-Original No. 50/ST/Commr/2010 dated 29.10.2010 passed by Commissioner of Central Excise, Customs & Service Tax, Aurangabad)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No 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 : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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CCE Aurangabad Appellant Vs. Tekcare India Pvt. Ltd. Respondent

Appearance: Shri S.R. Nair, E.O. (A.R.) for appellant None

CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

Date of Hearing: 14.07.2015 Date of Decision: 14.07.2015

ORDER NO

Per: M.V. Ravindran

This appeal is filed by Revenue against order-in-original 50/ST/Commr/2010 dated 29.10.2010.

2. None appeared on behalf of the respondent. On perusal of the records we find that the appeal could be disposed of in the absence of representation from the respondent, accordingly, we take up the appeal for disposal.

3. Heard learned D.R.

4. On perusal of the records we find that Revenue is aggrieved by the impugned order only to the extent that the adjudicating authority has not imposed penalty under Section 78 of the Finance Act, 1994, though there was a proposition and that the appellant had not discharged service tax liability as was expected out of them. We find that the adjudicating authority in this case while dropping the initiation of penalty under Section 78 has invoked the provisions of Section 80 by recording the following:-

8.3 As regards the imposition of penalty under Section 78 of the Finance Act, 1994, I find that there is some merit in the averments of the notice. In the Indian Milieu service tax is one of the more recent taxes imposed by the Central Government. In the sphere of economic taxation laws, dispute on interpretation of a particular statutory provision between the Government and the tax payer is bound to arise off and on. In the case of newer taxation laws like service tax, such disputes on interpretation of statute are bound to be relatively higher in the initial stages of implementation. In fact there could be situations where the tax payer may have failed to discharge a particular tax liability either out of ignorance of the liability to pay tax or otherwise because of his interpretation, albeit misplaced, that he is not required to pay such tax. While ignorance of law, or misplaced interpretation of law, is certainly not an excuse for not discharging the duty liability due to the exchequer, at the same time, it is also not necessarily to be concluded as a wanton action or inaction caused by mensrea. On the other hand, very often it is such disputes on taxability, between the Government and the tax payer that brings about finality of interpretation of a disputed legal provision by way of rulings thereof higher appellate Courts. Such ignorance or dispute by the tax payer should not be treated on par with clandestine or surreptitious provision of services, which are done with full knowledge of their taxability and with all attempts services, which are done with full knowledge of their taxability and with all attempts made to camouflage them or keep them away from the tax departments purview, with the sole intent of evading tax liability.

In the case under adjudication, I find that there has been some misplaced confusion on the part off the tax payer /notice with regard to the rate off tax changed during the currency of financial year. I find that assessee had entered into a revised agreement on 28.03.2009 which enhanced their service charges retrospectively from April 2008 and during recent past i.e. from 24.02.2009 the rate off Service Tax was payable by assessee, the same was recoverable from M/s Videocon &the credit of the Service Tax was available to M/s Videocon. I find that due to enhancement of charges &change of rate of Service Tax in the same period, there was a reasonable cause for clerical error and short payment and that the short payment is not deliberate. Hence, I take a lenient view and waive this penalty under Sec.80, as the assessee were under bonafide belief regarding the rate of service tax. It can be seen from the above reproduced findings, the adjudicating authority was correct in coming to the conclusion that penalty, in these kind of matters wherein question of interpretation involved, does not arise and invoking the provisions of Section 80, which in our view, is very correct and needs to be appreciated and we do so.

5. Impugned order is upheld to that extent with regard to the penalty being not imposed by invoking Section 80 of the Finance Act. Appeal filed by Revenue is rejected. Cross Objection filed by the assessee is also disposed of. (Dictated in Court)

(Raju) Member (Technical) (M.V. Ravindran) Member (Judicial)

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