Commissioner Of Central Excise, Pune I vs Neev Sai Builders

(Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-160-14-15 dated 15/01/2015 passed by Commissioner of Central Excise & Customs (Appeals), Mumbai)

For approval and signature:

Honble Mr. M.V. Ravindran, 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 : No 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. Neev Sai Builders Respondent

Appearance: Shri A.B. Kulgod, Assistant Commissioner (AR) for Appellant Shri Sagar Shah, CA with Shri Kaustubh Khairnar, Advocate, for Respondent

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

Date of Hearing : 27/10/2015 Date of Decision : 27/10/2015

ORDER NO

Per: M.V. Ravindran

This appeal is filed by the Revenue against Order-in-Appeal No. PUN-EXCUS-001-APP-160-14-15 dated 15/01/2015.

2. Heard both sides and perused the records.

3. The issue that falls for consideration is whether the first appellate authority was correct in holding that no penalty pest imposable under section 78 of the Finance Act 1994. As the respondent has discharged the service tax liability and the interest thereof before the issuance of the show cause notice.

4. The first appellate authority has relying upon the judgment of this bench in the case of this respondents associate company, Neev Sai Developers 2014-TIOL-2197-CESTAT-Mum, come to such a conclusion. I find that the first appellate authority has taken a view that the discharge of Service Tax liability along with interest would fall under the category of section 73 (3) of the Finance Act 1994, and there was no need for issuance of the show cause notice any further. It is the ratio coming out of the judgment of the tribunal. It is recorded that in the case of Neev Sai developers (supra). The set ratio is in paragraph no 5.1 which I reproduce.

5.1. Inasmuch as the service tax liability along with interest has been discharged prior to the issue of show cause notice, sub-section (3) of Section 73 provides for waiver of penalties if reasonable cause is shown for the failure to pay tax. It the present case, the appellant is small time service provider who is ignorant of the statutory provisions relations service tax. Therefore, the provisions of Section 73(3) and 80 could have been invoked and penalty should have been waived by the adjudicating/appellate authorities, which they have not done. However, we are of the view that, inasmuch as the service tax liability along with interest have been discharged prior to issue of show cause notice, the question of initiating any proceedings under Section 73 would not arise at all and consequently question of imposing any penalty also would not arise. Hence, we set aside the penalties imposed on the appellant.

5. In view of the facts of circumstances as indicated herein above, I find that the impugned order is correct and legal and does not suffer from any infirmity. The appeal is rejected.

(Dictated in Court)

(M.V. Ravindran) Member (Judicial)

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