M/S. G. Balakrishnan vs Cce, Madurai
- Case No.Appeal No. ST/682/2012
Ratio decidendi
The rule this decision rests on
Where a assessee has discharged the service tax liability before the show-cause notice was issued, has cooperated with the Revenue, and the delay in payment arose from ignorance of law without any intention to evade tax, the reasonable cause under section 80 of the Finance Act, 1994 justifies waiver of penalties under sections 76 and 78; and a penalty under section 77 for delay in seeking registration remains sustainable notwithstanding such reasonable cause.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 188/2012 dated 4.9.2012 passed by the Commissioner of Central Excise (Appeals), Madurai)
M/s. G. Balakrishnan Appellant
Vs.
CCE, Madurai Respondent
Appearance
Shri N. Viswanathan, Advocate, for the Appellant Mrs. Cecilia Parthasarathy, AC (AR) for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 18.06.2015
Final Order No. 40640 / 2015
Learned counsel explains that the appellant is a very small contractor having contract receipts of Rs.10 lakhs to Rs.15 lakhs per year. Revenue getting the figures from Income Tax authorities ascertained the liability of the appellant under the category of Maintenance and Repair Service. The tax liability so determined was discharged much before issuance of the show-cause notice.
2. The demand relates to the period from October 2004 to March 2008. When the appellant was guided by the Department to seek registration it has also sought such registration from April 2008. There was no intention at all to cause evasion of revenue. But for ignorance of law the delay in deposit of the service tax occurred and that to the liability based on the income tax return without examining the case of the appellant under Finance Act, 1994. The appellant is entitled to various deductions as a small tax payer as well as involvement of goods in the repair contract. But the appellant does not intend to dispute the determination of liability and cooperating to Revenue has discharged the liability as that was informed to the appellant.
3. Revenue supports the adjudication.
4. The cooperative attitude shown by the appellant as is stated above does not throw any light on malafides of the appellant. When the appellant has cooperated to discharge the liability and that to such liability based on income tax returns, it would not be proper to penalize the appellant for the reasonable cause stated and permitted by section 80 of Finance Act, 1994 to immune the bonafide cases from levy of penalty. However, delay in seeking registration shall call for penalty as that has been imposed by learned adjudicating authority under section 77 of Finance Act, 1994. That penalty of Rs.5,000/- is confirmed. There shall be no penalty under sections 76 & 78 of Finance Act, 1994 for the reasons stated above.
5. Appeal is allowed partly to the extent indicated above.
(Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
2
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