Cce Nagpur (In Appeal No. St/178/09) vs Murli Industries Ltd

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II

APPEAL NO. ST/178 and 193/09  Mum

Arising out of Order-in-Appeal No. SN/137/NGP/2009 dated 14.05.2009 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur.

For approval and signature:

Shri. M.V. Ravindran, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical)

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?

CCE Nagpur (in Appeal No. ST/178/09) Murli Industries Ltd. (in Appeal No. ST/193/09) : Appellant Appellant

Versus

Murli Industries Ltd. CCE Nagpur

Respondent

Respondent

Appearance

Shri R.K. Das, Dy Commissioner (A.R.) for Revenue Shri Vinay Jain, C.A. For assessee

CORAM:

Shri. M.V. Ravindran, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical)

Date of Hearing : 13.02.2015 Date of Decision : 13.02.2015

ORDER NO.

Per : M.V. Ravindran These two appeals are filed against the same Order-in-Appeal. Since the issue involved in both the appeals is same and in respect of the same assessee, they are being disposed of by a common order.

2. Heard both sides and perused the records.

3. On perusal of the records, it transpires that the service tax liability has been fastened upon the appellant on the ground that they have not discharged the service tax liability under reverse charge mechanism for an amount paid by them under the category of Banking and other Financial Services and have raised funds through External Commercial Borrowings (ECB).

4. Learned D.R. submits that their appeal is against the imposition of penalty under Section 78 of the Finance Act, 1994, and non-imposition of penalty under Section 76 of the same Act.

5. Learned Counsel would submit that on being pointed out by Revenue, the assessee has discharged the entire service tax liability and interest thereof before the issue of show-cause notice. This fact has not been disputed in the impugned orders.

6. In our considered view, if the assessee discharges the service tax and interest liability on his own ascertainment or on being pointed out by the Central Excise Officers, no show-cause notice is required to be issued as per provisions of Section 73(3) of the Finance Act, 1994. We also find that the appellant could have entertained a bonafide belief that such funds which are raised under ECB and amount paid by them to the foreign bank, may not be covered under the tax net. In our considered view, this is a fit case for invoking provisions of Section 80 of the Finance Act, 1994. We set aside the penalty imposed by the lower authorities by invoking the provisions of Section 80 of the Finance Act, 1994. Since we invoked the provisions of Section 80 of the Finance Act, 1994, we hold that Revenues appeal seeking imposition of penalty under Section 76 of Finance Act, 1994, also does not merit any consideration.

7. We set aside the penalty imposed by the first appellate authority and allow the appeal filed by the assessee and reject the appeal filed by the Revenue. (Dictated in open Court)

(P.R. Chandrasekharan) Member (Technical)

(M.V. Ravindran) Member (Judicial) nsk ??

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