Cce, Tirunelveli vs M/S. Tamil Nadu Mercantile Bank Ltd
- CitationAppeal No. 416/2009
Ratio decidendi
The rule this decision rests on
Where the law on whether reimbursed expenses are taxable was genuinely uncertain at the material time, and the adjudicating authority's finding that the assessee lacked any intention to evade is accepted, the imposition of penalty for non-payment of service tax is not sustainable; absence of wilful intention to evade, in the face of such legal confusion, negates liability to penalty.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 416/2009 dated 30.11.2009 passed by the Commissioner of Central Excise (Appeals), Madurai)
CCE, Tirunelveli Appellant
Vs.
M/s. Tamil Nadu Mercantile Bank Ltd. Respondent
Appearance
Shri L. Paneer Selvam, AC (AR), for the Appellant Shri M. Kannan, Advocate for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 24.04.2015
Final Order No. 40452 / 2015
Revenue says that waiver of penalty imposed in adjudication by appellate order is not justified.
2. Respondent opposes above submission on the ground that the appellant has not willfully evaded the payment of tax. It was not clear as to reimbursements of expenses whether shall be liable to service tax. But as soon as the Department informed that such a receipt is also liable to service tax, appellant discharged the liability. Therefore, learned Commissioner (Appeals) has rightly held that in absence of intention to evasion there shall not be liability to penalty.
3. Heard both sides and perused the records.
4. Respondent is correct to say that there was a confusion as to taxability of the reimbursements of expenses till the Larger Bench decision in the case of Sri Bhagavathy Traders Vs. CCE, Cochin 2011 (24) STR 290 (Tri. LB) came up. However, even that decision of Larger Bench of the Tribunal is subject matter of scrutiny before the apex Court in Civil Appeal No. 32257 of 2013 in the case of Union of India Vs. Intercontinental Consultants & Technocrats Pvt. Ltd. 2014 (35) STR J99 (SC).
5. Keeping in view the confusion in law and also the finding of learned Commissioner (Appeals) that there was no intention to evade service tax liability, Revenues appeal is dismissed.
6. In view of above decision, cross-objection also stands disposed.
(Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
2
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