M/S. Anandrishiji Hospital & Medical ... vs Commissioner, Central Excise ...

[Arising out of Order-in- Appeal No. AV(69) 48/2014 dtd. 22/4/2014 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad]

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? =======================================================

M/s. Anandrishiji Hospital & Medical Research Centre : Appellants

VS

Commissioner, Central Excise Aurangabad. : Respondent

Appearance

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

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 15/4/2015 Date of decision 15/4/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. AV(69) 48/2014 dtd. 22/4/2014 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad, wherein the Order-in-Original was upheld and the appeal was rejected. The fact of the case is that the appellant failed to obtain registration under Renting of Immovable property service, failed to pay service tax of Rs. 4,43,418/-and also failed to filed ST3 Returns. A show cause notice No. 31/ST/AC/2012 date 17/10/2012 was issued to the appellant proposing demand of Service Tax of Rs. 4,43,418/- and imposition of penalty and interest. Show cause notice was adjudicated wherein following order was passed:-

(A). I confirm the service tax on Renting of Immovable Property of Rs.4,43,418/- (Rs. Four Lakhs Forty Three Thousand Four Hundred Eighteen Only) under the proviso to Section 73 (1) of the Finance Act, 1994.

(B). I confirm recovery of interest on the confirmed amount Rs. 4,43,418/- above under the proviso to Section 75 of the Finance Act, 1994.

(C). I impose a Penalty of Rs.10,000/- or Rs.200/- for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance on the assessee under Section 77 of Chapter V of the Finance Act, 1994 in contravention of Section 69 of the Finance Act, 1994 read with Rule 4(1) of the Service Tax Rules, 1994.

(D). I charge and order recovery of late fee Rs.2,000/- or Rs.20,000/- (as applicable) per ST-3 return on the assessee under Section 77 of the Finance Act, 1994 for failure to file ST-3 returns.

(E). I impose a Penalty of Rs.100/- for every day during which such failure continued or @ 1% of demand per month, whichever is higher, starting with the first day after the due date, till the date of actual payment under Section 76 of the Finance Act, 1994 read with Rule 6 of the Service Tax Rules, 1994 to pay service tax.

Aggrieved by the said Order-in-Original the appellant filed appeal before the Commissioner(appeals) who upheld the order-in-original and rejected the appeal of the appellant. It is also the fact that appellant deposited the entire service tax amount alongwith interest on 23/11/2012. Aggrieved with the said Order-in-Appeal dated 22/4/2014 the appellant filed present appeal.

2. None appeared on behalf of the appellant.

3. Shri. B.K. Iyer, Ld. Superintendent(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

4. I have carefully considered the submission made by Ld. A.R. and perused the record.

5. As regard the demand of service tax on services, there is no dispute that Renting of Immovable property service indeed taxable. However, the appellant contested demand on the ground on time bar. I find that though the show cause notice was issued for the period July, 2011 to December, 2011 on 17/10/2012 but on going through the facts of the case, I find that the appellant neither obtained registration from the service tax department nor filed ST3 returns and also failed to pay service tax. This fact was not known to the department and appellant has suppressed their activity therefore demand is for the extended period is correct and legal. Therefore, the service tax demand of Rs. 4,43,418/- and interest thereupon is upheld.

5.1 As regard penalty imposed under Section 76, 77, the appellant submits before the Commissioner(Appeals) as well as before this Tribunal that the demand is pertaining to July, 2011 to December, 2011 which was paid alongwith interest on 26/11/2012 therefore the case is covered under Subsection (2) of Section 80 hence no penalty should be imposed. I find that the Ld. Commissioner(Appeals) has rejected the claim of the appellant for waiver of penalty under Section 80(2) on the ground that in earlier proceedings involving demand for the period January-March 2012 the Commissioner vide the Order-in-Appeal No. AV(13-15) 19, 20, 21/2013 dated 30/1/2013 denied the benefit of Section 80(2). The Ld. Commissioner contended that once benefit of Section 80(2) was denied in the earlier proceedings and the same was not challenged it attains finality and therefore in this case this benefit cannot be extended. I do not agree with this contention of the Ld. Commissioner. As regard service of Renting of Immovable property specific provision was enacted by inserting subsection (2) in Section 80 of the Finance Act, 1944 which is reproduced below:

The new Section 80(2) reads as:

Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President .

From the Subsection (2) of Section 80, it is clear that if service tax due on 6th march 2012 paid alongwith interest within six months from the date of enactment of Section (2) of Section 80. In the present case the fact is that the demand pertains to the period of July 2011  December, 2011 which was paid on 23/11/2012 therefore this amount was due on 6/3/2012 and same was paid within six months from the date of enactment of the Section 80(2) i.e. on or before 27/11/2012. Under this undisputed facts, the case of the appellant is squarely covered under Section 80(2). I do not agree with the contention of the Ld. Commissioner(Appeals)that since demand pertains to January  March 2012 was not paid in time and the benefit of Section 80 (2)was denied. The appellant is entitled for the waiver of penalty under Section 80(2). In the present case of the subject matter the demand for the period July December 2011 cannot be related to other proceedings of the appellant. In my considered view what is to be seen is the period of demand in this particular case and the date of payment of the demand involved in this case. Therefore the contention of the Ld. Commissioner(Appeals) is misleading and also not relevant to this particular case. In view of my above observations, I am of the view that impugned order is not sustainable hence the same is set aside. The demand of service tax and interest is upheld, penalty of Section 76, 77 are dropped. The appeal allowed in the above terms.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

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