Kedar Agrawal vs Nagpur

[Arising out of Order-in-Appeal No.SR/256-257/NGP/2011 dated 21/02/2011 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Nagpur.]

For approval and signature:

Honble Shri M V Ravindran, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : No 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes

Kedar Agrawal

Appellant Vs

Commissioner of Customs & Central Excise

Nagpur

Respondent

Appearance:

Shri Rahul Yadav, Engineer/Employee for the appellant

Shri B. Kumar Iyer, Superintendent (AR) for the respondent

CORAM:

Honble Shri M V Ravindran, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

Date of hearing: 04/08/2015 Date of decision: 04/08/2015

ORDER NO: ____________________________

Per: M.V. Ravindran:

This appeal is directed against Order-in-Appeal No.SR/256-257/NGP/2011 dated 21/02/2011 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Nagpur

2. Heard both the sides and perused the records.

3. The issue involved in this case is whether the appellant is liable to pay service tax liability under the category of Site Formation and Clearance Service rendered by them to one M/s. Murli Industries Ltd. under works contract for the period 16/07/2007 to 31/03/2009. Both the lower authorities have held against the appellant. The appellant in the memorandum of appeal submits that they have already discharged the service tax liability and interest thereof. The appellant seeks leniency in imposition of penalty on the ground that there was no malafide intention in not discharging service tax liability as they were under the impression that the services rendered by them would fall under the category of Mining Service.

4. On consideration of the submissions made by both the sides, we find that there is no dispute as to the fact that the appellant is liable to discharge service tax and interest thereof under the category of Site Formation and Clearance Service. We also find from the appeal memorandum that the appellant is not seriously contesting the service tax liability and interest thereof, and the representative of the appellant also submits that they would like to close the issue at the hands of the Tribunal. As the appellant is not contesting the service tax liability and interest thereof, we uphold that part of the order and reject the appeal of the appellant on this point.

5. As regards the penalties, we find that the appellant has not filed returns nor has he taken registration certificate. Accordingly, the provisions of Section 76 and 77 of the Finance Act, 1994 gets attracted and penalties as per these provisions has to be paid by the appellant. We find that the adjudicating authority has imposed a penalty of ` 5,000/- under Section 77 and the first appellate authority has imposed a penalty of ` 200/- per day or 2% of the amount per month as per the provisions of Section 76. The lower authorities are directed to calculate the said amount of penalties and intimate the appellant. At this juncture the representative of the appellant submits that they have deposited an amount of ` 1.50 lakhs on direction of the Tribunal at the stay petition stage. Lower authorities will adjust this amount of ` 1,50,000/- from the total penalty worked out under Sections 76 and 77 of the Finance Act, 1994.

6. As regards the penalty under Section 78, we find that the appellant need not be visited with such penalty as there could be a genuine misunderstanding of the provision of law inasmuch as the activity undertaken by the appellant may fall under the category of Mining Service and interpretation could be a bona fide one. Accordingly, by invoking the provisions of Section 80 of the Finance Act, 1994 as it was during the relevant period, we set aside the penalty imposed by the lower authority under Section 78 of the Finance Act, 1994 and allow the appeal to that extent.

7. In sum, appellants appeal against confirmation of service tax liability, interest thereof, and penalties under Sections 76 and 77 are rejected. While appeal to the extent of imposition of penalty under Section 78 is allowed.

(Dictated in Court) (C J Mathew) Member (Technical) (M V Ravindran) Member (Judicial)

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ST/331/2011