Cce, Tirunelveli vs M/S. Universal Abrasives And Minerals ...
- Case No.Appeal No. ST/448/2010
Ratio decidendi
The rule this decision rests on
Where the assessee's liability to service tax was genuinely uncertain on the law and the assessee paid the tax once the Department raised the demand, the confusion as to taxability is a sufficient ground for not imposing the penalty under section 78 of the Finance Act, 1994, the Tribunal upholding the Commissioner (Appeals)'s relief from that penalty on that footing.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 99/2010 dated 30.3.2010 passed by the Commissioner of Central Excise (Appeals), Madurai)
CCE, Tirunelveli Appellant
Vs.
M/s. Universal Abrasives and Minerals Pvt. Ltd. Respondent
Appearance
Shri K.P. Muralidharan, AC (AR), for the Appellant Shri S. Venkatachalam, Advocate for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 17.06.2015
Final Order No. 40643 / 2015
Learned counsel Shri S. Venkatachalam undertakes to file the memo of appearance today and vakalat within a week hereof. Registry to take the vakalat once that is filed.
2. Revenue is in appeal against order of learned Commissioner (Appeals) praying for imposition of penalty under section 78 of Finance Act, 1994. Commissioner (Appeals) considered the confusion about the applicability of the law relating to taxation of Business Auxiliary Service. He has recorded that respondent has voluntarily paid the tax liability when it was brought to its knowledge. Therefore, he has also granted concession in imposition of penalty of Rs.1,000/- under section 77 and reduced the penalty under section 76 to Rs.1,00,000/-.
3. The activity carried out by the respondent was grading of granulated copper slag. Respondents claim that it was under bonafide belief that its activity is not liable to service tax. But, when the Department insisted for deposit of the tax they realized from the principal manufacturer and deposited the same.
4. The confusion that is apparent from the record as to taxability is appreciable. Therefore, Commissioner (Appeals) has rightly immuned the appellant from imposition of penalty under section 78 of the Finance Act, 1994. Accordingly his order is upheld and Revenue appeal is dismissed. (Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
2
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