Commissioner(Review), Service Tax, ... vs M/S. Alliance Facilities Management ...

[Arising out of Order-in-Appeal No. MI/AV/167/2011 dtd. 25/3/2011 passed by the Commissioner (Appeals), Central Excise, Mumbai Zone-I]

For approval and signature:

Honble Mr Ramesh Nair, 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 : 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(Review), Service Tax, Mumbai-II : Appellants

VS

M/s. Alliance Facilities Management Pvt. Ltd. : Respondent

Appearance

Shri. B.K. Iyer, Superintendent (A.R.) for the Appellants None for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 22/6/2015 Date of decision: 22/6/2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in-Appeal No. MI/AV/167/2011 dtd. 25/3/2011 passed by the Commissioner (Appeals), Central Excise, Mumbai Zone-I, wherein Ld. Commissioner (Appeals) reduced the demand of service tax from Rs. 4,08,382/- to Rs. 3,17,260/- and upheld the penalty of Rs.4,000/- under Section 77, penalty under Section 78 was also reduced to Rs. 3,17,260/- and the penalty under Section 76 was set aside. Revenue filed this appeal only aggrieved the portion of the order by which penalty under Section 76 was set aside.

2. B.K. Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue submits that in original order, the adjudicating authority given clear findings that there was suppression of fact in non payment of service tax on the part of the respondent. Therefore original authority has rightly imposed the penalty under Section 76 and 78 simultaneously. He submits that for imposition of penalty under Section 76, no mens rea is required. When there is admitted service tax liability, penalty under Section 76 was rightly imposed by the original authority. Therefore Ld. Commissioner (Appeals) has erred in dropping the penalty under Section 76.

3. When the matter was called for, none appeared on behalf of the respondent nor any communication for adjournment, therefore I am taking up the matter for disposal on merit.

5. On careful consideration of the submission made by Ld. A.R. and perusal of record, I find that Ld. Commissioner (Appeals) has upheld the penalty imposed under Section 77 and Section 78, set aside the penalty under Section 76 on the ground that end of justice will be met; therefore penalty under Section 76 was set aside. On going through the facts of the case, I find that the department has detected non payment of service tax on verification of the respondents balance sheet for the year 2002/03, 2003/04 and 2004/05. The data was retrieved from the balance sheet from accounting head that certain services have been provided by the respondent. The respondent has deposited service tax liability during adjudication on the ground that services were wrongly classified on the basis of accounting heads appear in the balance sheet. The respondent submission before the Commissioner (Appeals) was that service tax being new levy concept of classification of service was not clear to the respondent. However they have taken registration in the category of management and consultation after consultation with Jurisdictional Central Excise, Superintendent. In view of this fact since there was dispute regarding the classification of the service and taking into overall facts and circumstances of the case, particularly respondent have recorded all the transaction of the service provided by them in their books of accounts, I am of the considered view that penalty under Section 76. set aside by the Commissioner (Appeals) is in order as waiver of penalty is provided under Section 80 of the Finance Act, 1994, particularly, when the respondent have already been penalized under Section 77 and 78. The Ld. Commissioner (Appeals) has exercised his discretion and dropped the penalty. I therefore do not find any infirmity in the findings of the Ld. Commissioner (Appeals), therefore upheld the impugned order and dismiss the appeal of the Revenue.

(Dictated in court)

Ramesh Nair Member (Judicial)

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