M/S. C.B. Venkatesh & Co vs Commissioner Of Central Excise & ...

[Arising out of Order-in-Appeal No.CMB-CEX-000-APP-204-12, dated 28.09.2012 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore]

M/s. C.B. VENKATESH & CO. APPELLANT

Versus

COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, COIMBATORE RESPONDENT

Appearance:

For the Appellant Shri N.Viswanathan, Adv.

For the Respondent Shri B. Balamurugan, AC (AR)

CORAM:

Honble Shri D.N. Panda, Judicial Member

Date of hearing/decision 30-09-2015

FINAL ORDER NO.41314 / 2015

Learned counsel says that levy on renting of immovable property was under confusion. That was ultimately crystallized by retrospective amendment to the Finance Act, 2010. The appellant therefore has suffered penalty for belated payment but no reason of deliberate evasion attributable to it. He fairly submits that taxes were collected as a precautionary measure to protect its interest. But there was no intention to cause evasion to Revenue but to compensate Revenue if the levy become constitutional. Such a reasonable cause deserves consideration of the gravity of the matter since mere collection of the service tax for above reason beyond control of appellant shall not disentitle the appellant to the benefit of Section 80 of the Finance Act. 1994. It is further submission on behalf of the appellant that the retrospective levy made by Finance Act, 2010 also in all fairness has intended that no act or omission on the part of any person shall make it liable to punishment considering no offence committed. Therefore, law having granted immunity from prosecution, immunity from penalty is also not denied by law. In this regard, he submits that following decision of the apex court in the case of J. K. Spinning and Weaving Mills Ltd., and Anr. Vs Union of India and Ors., reported in 1987 (32) E.L.T.234 (S.C.), appellant should not be penalized.

2. Revenues only submission is that once there was default, penalty should follow under Section 78 of the Finance Act, 1994.

3. Heard both sides and perused the records.

4. The conduct of the assessee does not appear to be contumacious but the fact remains is that there was collection of the tax by the appellant during introduction stage of levy which was crystallized by judicial pronouncement in the case of Home Solutions Retail Ltd. Vs Union of India reported in 2010 (19) S.T.R.3 (Del.) holding the levy constitutional. Therefore, he has to discharge levy of service taxliability without raising any doubt on that. Penalty for intention to cause evasion does not arise in the circumstances of the case. When retrospective levy imposed an obligation which otherwise was in question, prior to the amendment of law and assessee discharged tax liability as well as liability for the default period, it would be contrary to the legal jurisdiction to penalize the person in a quasi-criminal proceeding of levy of penalty, following judgment of the apex court in the case of J.K. Spinning and Weaving Mills Ltd. and Another Vs Union of India and Ors., reported in 1987 (32) E.L.T. 234. (S.C.) and mandate of the statute. It may be stated that the present case is a case, where reasonable cause for waiver of penalty exists. Accordingly, appeal is allowed, waiving penalty. (Dictated and pronounced in open court)

(D.N. PANDA) JUDICIAL MEMBER

ksr 03-10-2015

DRAFT Remarks

I II III

Date of dictation 30.09.2015

Draft Order - Date of typing 01.10.2015 03.10.2015

Fair Order Typing 06.10.2015

Date of number and date of dispatch

5 ST/40082/2013