Commissioner Of Central Excise, Pune-I vs M/S Taib Landscape Studio Pte. Ltd

(Arising out of Order-in-Appeal No. PI/RKS/212/2010 dated 1.11.2010 passed by the Commissioner of Central Excise (Appeals), Pune-I).

For approval and signature:

Honble Shri Anil Choudhary, Member (Judicial)

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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 : Yes 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? ======================================================

Commissioner of Central Excise, Pune-I Appellant

Vs.

M/s Taib Landscape Studio Pte. Ltd. Respondent

Appearance: Shri A.B. Kulgod, AC (AR) for Appellant

None for Respondent

CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)

Date of Hearing: 29.05.2015

Date of Decision: 29.05.2015

ORDER NO.

Per: Shri Anil Choudhary

The Revenue is in appeal against Order-in-Appeal No. PI/RKS/212/2010 dated 1.11.2010 passed by the Commissioner of Central Excise (Appeals), Pune-I by which the order of the adjudicating authority was upheld to the extent of confirmation of demand of Service Tax amounting to Rs.25,00,640/- with interest of Rs.2,81,592/-. However, penalties imposed under Sections 76, 77 and 78 were set aside under the provisions of Section 80 of the Finance Act, 1994. Being aggrieved with the deletion of penalty, the Revenue is in appeal.

2. The brief facts of the case are that the assessee respondent is a company engaged in the business of Architect Services including Landscaping. A show-cause notice dated 10.7.2009 was issued for the period April, 2007 to April, 2009 requiring the assessee to show cause as to why Service Tax amounting to Rs.9,731/- should not be demanded and recovered under Business Support Services as the service provided during 2006-07 and Landscape Designing & Consultancy Service provided by the assessee should not be classified under Interior Decorator Services. Further, an amount of Rs.24,90,909/- including cess charged and collected from the client by the assessee during the period April, 2007 to February, 2009 should not be demanded and recovered and further an amount of Rs.18,98,565/- already paid should not be appropriated against the tax demand and further interest amount of Rs.2,81,592/- should not be demanded and appropriated from the amount already paid and further penalties under Sections 76, 77 and 78 should not be imposed.

2.1 In reply the assessee contested the show-cause notice by filing reply stating that they are engaged in providing Landscape Designing mainly to the builders and are registered with the Service Tax department under Architect Services. The main activity was to provide Landscape consultancy for the outdoor area around the proposed construction by the builder. It was further contested by the assessee that they were under bona fide belief that services provided by them fall under Architect Services and therefore, they did not register under the Interior Decorator services. It was further stated that Service Tax was not pain on the assumption that Landscape Consultancy is not covered under the Service Tax provisions. It was further stated that on being so pointed out by the Revenue that the Landscape design is taxable under the Head Interior Decorators, they have paid the Service Tax as applicable amounting to Rs.28,42,386/- along with interest of Rs.3,08,346/-.

2.3 The show-cause notice was adjudicated vide Order-in-Original dated 15.6.2010 adjudicating the proposed demand and also appropriated the amount already paid. Further, the penalties were imposed under Sections 76, 77 and also 78 an amount equal to tax on the allegation of suppression of the value of taxable services from the Revenue.

2.4 Being aggrieved, the assessee preferred appeal before the Commissioner (Appeals), who vide the impugned order has found that although there was a delayed payment of Service Tax, however, the assessee have paid the Service Tax along with interest before issue of show-cause notice. The allegation of suppression of facts, charged in the show-cause notice is mainly based on the fact that the assessee have not filed ST-3 Returns on time. Relying on the ruling of the Tribunals decision in the case of Top Detective and Security Services Pvt. Ltd.  2005 (180) ELT 373 (Tri-Mum), wherein the fact was that the Service Tax and interest was paid before the issue of show-cause notice, the penalty under Section 76 and 77 is not mandatory for late filing of returns. In that case, considering the plea of the assessee that late receipt of payment from the customers resulted in delayed payment of Service Tax, the Commissioner (Appeals) had set aside the penalty and the Revenue was in appeal before the Tribunal. The learned Commissioner (Appeals) has found the facts similar to the Top Detective and Security case (supra). So far the imposition of penalty under Section 76, 77 and 78 was concerned, the Tribunal was pleased to set aside the same. Further, as regards the penalty under Section 78, the appellant collected amount of Service Tax but not paid to the department, it was the plea of the department that the Service Tax amount was not paid at time. However, the same was paid along with interest subsequently and in any case before the issue of show-cause notice. Relying the ruling of this Tribunal in the case of Siger Spintech Equipments Pvt. Ltd. Vs. Vs. CCE  2006 (3) STR 236 (Tri-Chennai), the learned Commissioner (Appeals) found the ratio applicable to the facts of the present case and held that penalty imposed on all the Sections 76, 77 and 78 is not sustainable and therefore, set aside the same.

3. Being aggrieved, the Revenue is in appeal before this Tribunal on the ground that some part of the tax was paid after issue of show-cause notice. In support, the Revenue have produced a report dated 3.11.2014 sent by the Addl. Commissioner, which states that Dy. Commissioner has confirmed that the assessee has paid the Service Tax amount of Rs.18,98,565/- and amount of interest of Rs.2,81,592/- giving details of payment in tabular for, which affirmed the contention of the assessee that the assessee had paid tax amount of Rs.18,98,565/- before the issue of show-cause notice.

4. As the proposed tax amount in the show-cause notice under both the head Rs.25,00,640/-, thus the ground of the Revenue fails that the same part of the amount paid after issue of show-cause notice. Further as per the chart, all the payments made latest by 4.4.2009, which is prior to issue of show-cause notice dated 28.7.2009. Thus, I hold that the appeal of the Revenue is erroneous and in mistake of facts and fit to be dismissed.

5. Thus, the appeal is rejected and the Cross-Objection is allowed for statistical purpose.

(Dictated and pronounced in Court)

(Anil Choudhary) Member (Judicial)

Sinha

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