Commissioner Of Central Excise & ... vs M/S. Kavi Contractors
- CitationAppeal No.86 to 91/2014 (PST), dated 05.05.2014 passed by the Commissioner of Central E
Ratio decidendi
The rule this decision rests on
Where the show-cause notice does not clearly establish the taxable service actually rendered, and the authorities have not examined the relevant invoices or evidence to determine that service and its classification, the penalty under sections 76 and 78 of the Finance Act, 1994 cannot be sustained on a notice that is not well founded, and is to be waived. A penalty under section 77(1) of the Finance Act, 1994 is not affected by the defect in the show-cause notice underlying sections 76 and 78, and survives; the adjudication on that penalty is restored to the adjudicating authority.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Orders-in-Appeal No.86 to 91/2014 (PST), dated 05.05.2014 passed by the Commissioner of Central Excise (Appeals), Chennai]
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, PUDUCHERRY APPELLANT
Versus
M/s. KAVI CONTRACTORS RESPONDENT
ST/41878,41879/2014
[Arising out of Order-in-Appeal No.109/2014(P)(ST), dated 20.05.2014 passed by the Commissioner of Central Excise (Appeals), Chennai]
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, PUDUCHERRY APPELLANT
Versus
M/s. V.M. CONVERTERS RESPONDENT
Appearance:
For the Appellant Shri R. Subramaniyan, AC (AR)
For the Respondent Shri R. Srinivasan, Cons.
CORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision 01-10-2015
FINAL ORDER NO.41325-41327 / 2015
It is the submission on behalf of Revenue that the issue involved in these two appeals is whether activity carried out by respondent was liable to tax and if so for breach of law whether penalty is leviable? Learned Commissioner (Appeals) without recording the reason for wavier of penalty imposed under section 76,77 and 78 of the Finance Act, 1994 waived the same for no rhyme or reason. For such reason, Revenue is aggrieved against the waiver of penalty in the present appeals.
2. Respondent say that when they were guided by legal consultation, they discharged tax liability with interest for which levy of penalty shall be harsh.
3. Heard Revenue as well as respondents.
4. Perusal of the show-cause notice in these cases shows that , it was not mere supply of labour was the activity of the respondent. But was also obliged to carry out other activity of unloading of material to store/production area and pack the same.
5. None of the authorities have examined the invoices of the respondent. Had there been examination of relevant evidence that could have enabled them to reach to a proper conclusion as to what was the service actually provided by the assessee. Whether mere supplyi of labour was the activity or that was followed by any further activity of unloading, staking and packing could have been ascertained and classification could have been examined which goes to the root of the matter.
7. For no well founded show-cause notice, there shall be waiver of penalty imposed under section 76, and 78 of the Act. But penalty imposed under section 77 (1) shall continue. To this extent, adjudication is restored modifying the order of learned Commissioner (Appeals. (Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
ksr 08-10-2015
DRAFT Remarks
I II III
Date of dictation 01.10.2015
Draft Order - Date of typing 05.10.2015 06.10.2015
Fair Order Typing 08.10.2015
Date of number and date of dispatch 09/10/2015
4 ST/41837/2014
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