M/S. Dr. B.B. Tanpure S.S. K. Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in- Appeal No. AV(252) 215/2012 dated 03/12/2012 dtd. 3/12/3012 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. Dr. B.B. Tanpure S.S. K. Ltd. : Appellants

VS

Commissioner of Central Excise, Customs & Service tax, Aurangabad : Respondent

Appearance

None for the Appellants Shri. S. V. Nair, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 17/4/2015 Date of decision: 17/4/2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in- Appeal No. AV(252) 215/2012 dated 03/12/2012 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad, wherein he upheld the Order -in-Original and rejected the appeal of the appellant. The fact of the case is that the appellant is engaged in the manufacture of Sugar, Molasses. In an investigation carried out by the DGCEI, it was revealed that during the period July, 2008- November, 2009 the appellant has not paid service tax amounting Rs. 3,58,615/- on transportation charges on reveres charge basis. A show cause notice dated 29/2/2012 was issued wherein the said demand was proposed and interest of Rs. 22,474/- was also proposed, it was proposed to impose penalties under Section 76 and 78 of the Finance Act, 1994. Show cause notice were adjudicated and charges proposed in the show cause notice were confirmed and amount of service tax alongwith interest already paid were appropriated and penalties under Section 76 & 78 were imposed. Aggrieved by the said order the appellant filed appeal before the Commissioner(Appeals) who after considering the ground taken by the appellant before the Commissioner (Appeals) upheld the confirmation ordered in the order-in-original. The appeal filed by the appellant was rejected. Aggrieved by the said impugned order the appellants filed this appeal only for waiver of penalty of equal amount of service tax under Section 76 and 78 of Finance Act, 1994.

2. When the matter was called for hearing none appeared on behalf of the appellant nor any adjournment request was found. From the appeal record I observed that matter was earlier listed on 16/1/2015 and 20/2/2015 however nobody appeared therefore I am taking the appeal to decide on merit.

3. On the other hand, Shri. S. V. Nair, Ld. Asst. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that appellant have not declared correct freight amount in the ST3 returns therefore suppressed the fact. Hence they were correctly imposed penalties under Section 76 and 78. He prays for upholding the impugned order.

4. I have carefully considered the submissions made by Learned A.R. and perused the record.

5. The appellant have deposited the payment of service tax and interest and intimated to the department on 23/2/2010 i.e. which is before the issuance of show cause notice which was issued on 29/2/2012. I observed that when the service tax alongwith interest admittedly paid immediately after pointed out by the officers, show cause notice should not have been issued in terms of Section 73(3) of Finance Act, 1994:

(3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the 6[Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid :

From the above Section It is clear that either on the ascertainment of assessee on their own or by the department if the service tax and interest thereon is paid admittedly without contesting and intimated to the department, the department should not have issued any show cause notice. On this issue, this Tribunal consistently held that in similar situation show cause notice should not be issued accordingly penalty should not be imposed in the following judgments:

Santhi Casting Works Vs. Commissioner of C. Ex. Coimbatore [2009 (15) STR 219 (Tri. Chennai)]

Penalty(Service Tax_- Delay on payment of Service Tax- Service Tax on Technical Testing and Inspection service not paid initially but paid later with interest- Section 73(3) of Finance Act, 1994 providing for non-issue of show cause notice when Service Tax paid with interest voluntarily-C.B.E. & C. vide circular dated 3/10/2007 clarified conclusion of proceedings in such a situation-Penalty not imposable- Section 73 and 76 ibid.

Tidewater Shipping Private Ltd. Vs. Commr. of Service Tax, Bangalore 2008 (11) STR 475 (Tri-Ban.)

Penalty (Service Tax)-Imposition of Due to bonafide belief Service tax liability not discharged in time, but as soon as lapse pointed out by Department Service Tax along with interest paid, much before issuance of SCN- Section 73(3) of Finance Act, 1994 and C.B.E.& C. Circular providing no penalty imposable if assessee cleared tax due along with interest on his own and even on insistence of Department- Impugned revisionary order enhancing penalty not sustainable-Section 76,77 and 78 ibid.

In view of the above judgments and considering the facts and circumstances of the case, I am of the view that the cases cited by the appellant squarely covered by the provision of Section 73(3) of Finance Act, 1994 and accordingly no show cause notice should have been issued and consequently no penalty should have been imposed. In view of the above discussion, I allow the appeal, however payment of service tax alongwith interest is maintained.

(Operative order pronounced in court)

Ramesh Nair Member (Judicial)

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