Hindustan Coca Cola Marketing Co. Pvt. ... vs Commissioner Of Service Tax

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II

APPEAL NO. ST/312/09  Mum

Arising out of Order-in-Original No. 10/STC/BR/2009-10 dated 16.09.2009 passed by the Commissioner of Service Tax, Mumbai.

For approval and signature:

Shri. M.V. Ravindran, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical)

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?

Hindustan Coca Cola Marketing Co. Pvt. Ltd. : Appellant

Versus

Commissioner of Service Tax, Mumbai

Respondent

Appearance

Shri Jeetu Motwani, Advocate for appellant Shri K.S. Mishra, Addl. Commissioner (A.R.) For Respondent

CORAM:

Shri. M.V. Ravindran, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical)

Date of Hearing : 12.01.2015 Date of Decision : 12.01.2015

ORDER NO.

Per : M.V. Ravindran The appeal is directed against Order-in-Original No. 10/STC/BR/2009-10 dated 16.09.2009.

2. Heard both sides and perused the records.

3. On perusal of the records it transpires that the appellant is in appeal against the order of the Commissioner on the ground that the appellant had already discharged the service tax liability and is contesting only for setting aside the penalties imposed by the adjudicating authority.

4. Learned Counsel submits that they are not contesting the issue of service tax liability but are seeking indulgence of the Bench for setting aside the penalties imposed by the adjudicating authority under Sections 76, 77 and 78 of the Finance Act, 1994. He would draw our attention to the statement made by Shri Sanjay Aggarwal wherein he has clearly stated that they were not aware that the appellants Company has to pay tax and got registered service tax registration immediately. He would also bring to our notice that the entire service tax liability and the interest thereof have been paid before the issuance of the show-cause notice. He would submit that the decision of the Honble Madras High Court in the case of CCE Puducherry v. CESTAT Chennai - 2014 (35) STR 32 (Mad.) is on identical issue of penalty on recipient of goods transport operator services and the penalty has been set aside by the Honble High Court. He would also rely upon the decision of Coordinate Bench of the Tribunal in the case of CCE Panchkula vs. Karna Soap Industries - 2010 (19) STR 794 (Tri.  Del.) which is on the similar set of facts.

5. Learned D.R appearing for the Revenue on the other hand would submit that the appellant is in an organized sector and aware of the provisions of law. He would then read the show-cause notice and submit that an intelligence was received that the appellant, as recipient of services from Goods Transportation Agency, was not discharging service tax liability on the services received. He would rely upon the decision in the case of Interscape vs. CCE Mumbai - 2006 (198) ELT 275) (Tri.  Mum), Punjab and Haryana High Court decision in the case of CCE Delhi III vs. Machino Montell (I) Ltd.  2006 (202) ELT 398 and Dixon Electronics v. CCE - 2008 (10) STR 390 (Tri Del) while pressing his view that penalties imposed on the appellant are correct and once there is a violation of provisions of the Act, penalty should be imposed under various provisions of the Finance Act, 1994

6. Heard both sides and perused the records.

7. We find from the records that the appellant is not contesting the service tax liability and interest paid thereof, which was due from January 2005 to January 06 under the category of Goods Transport Agency Services. It is not in dispute that the appellant is recipient of the service and needs to discharge the service tax liability accordingly we uphold the tax liability with interest. This raises the question on imposition of penalties on appellant. The adjudicating authority in his findings has recorded that the appellant had not paid service tax liability by suppressing the fact that they are recipient of service under GTA services and has not taken registration for payment of service tax. We find that on being pointed out by the Anti Evasion Section, the appellant had discharged the service tax liability before issuance of show-cause notice along with interest. In our considered view, this action of the appellant gets covered under the provisions to Section 73(3) of the Finance Act, 1994. The said section specifically provides that no show-cause notice is required to be issued if the assessee discharges the service tax and interest liability on his own ascertainment or on being pointed out by the department. We find strong force in the contentions raised by the learned Counsel that the assessee could have been under some kind of confusion during the period when the levy was introduced on 01.01.2005. The ratio of the judgement of the Tribunal in the case of Karna Soap Industries (supra) is on the very same set of facts and on very same services and the period is also identical as is in the case in hand. In our considered view, this is a fit case for invoking provisions of Section 80 of the Finance Act, 1994, as we find that there can be a reasonable cause for not discharging the service tax liability during the material period in question. By invoking the said provisions of Section 80 of the Finance Act, 1994 we set aside the penalties imposed by the adjudicating authority.

8. In view of the foregoing, the appeal is allowed to the extent the appeal challenges the imposition of penalties.

(Dictated in open Court)

(P.R. Chandrasekharan) Member (Technical)

(M.V. Ravindran) Member (Judicial) nsk

??

??

??

??

5