M/S Imranullah Naimullah vs Commissioner Of Customs And Service ...

IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV

APPEAL NO. ST/86485/14  Mum

(Arising out of Order-in-Appeal No. NGP/EXCUS/000/APP/037/13-14 dated 11.02.2014 passed by the Commissioner of Central Excise & Service Tax (Appeals), Nagpur.)

For approval and signature: Honble Shri Anil Choudhary, 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 : Yes 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 Imranullah Naimullah

: Appellant Versus

Commissioner of Customs and Service Tax, Nagpur : Respondent

Appearance Shri P.V. Sadavarte, Advocate : For Appellant Shri S.R. Nair, Examiner (A.R.) : For Respondent

CORAM: HONBLE SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)

Date of Hearing : 15.05.2015 Date of Decision: 15.05.2015

ORDER NO.......................................................

Per: Anil Choudhary:

The appellant is in appeal against confirmation of penalty under Section 77 and 78 of the Finance Act, vide the impugned order.

2. The brief facts are that during the course of audit of one M/s Mohan Shriram Nimdeokar (Principal), it was observed by auditors from the Service Tax department that, the appellant has supplied the manpower to M/s Mohan Shriram Nimdeokar (Principal) for under taking the work of commissioning and installation and as such is liable for Service Tax under the category Manpower Requirement Agency Services. It is further undisputed fact in the show-cause notice that the appellant had neither charged Service Tax in their bills nor the principal had given any service tax to the appellant. Under such circumstances the appellant on being put to notice by the Revenue, admitted his liability to tax and deposited the service tax praying for the benefit under Section 73 (3) of the Finance Act. However show-cause notice dated 15/4/13 was issued requiring to show-cause as to why an amount of Rs. 2,95,007/ being tax for the period 200910 and 2010 11 be not demanded and appropriated from the pre-deposit already made and further why not the amount of interest calculated at Rs. 2,66,760/- which were pre-deposited be not appropriated. Further penalty was proposed under Section 76, 77 and Section 78 of Finance Act.

3. The appellant contested the show-cause notice stating that it is not a case of deliberate default and the default occurred due to ignorance of the provisions of the service tax and further prayed for the benefit of Section 73(3) as it had admitted the tax liability and deposited the same with interest at the first instance, that to before issue of show-cause notice. However the show-cause notice was adjudicated and the proposed demand confirmed vide Order-in-Original and further penalty was imposed under Section 76 of Rs. 200/- per day or 2% of such tax per month not exceeding Rs. 2,95,007/- and further penalty of Rs. 1000/- under Section 77 and equal amount of penalty Rs. 2,95,007/- under Section 78 was imposed. Being aggrieved, the appellant filed the appeal before Commissioner (Appeals). The learned Commissioner (Appeals) vide impugned order was pleased to allow the Small Service Providers benefit thereby the amount of tax was reduced to Rs. 1,74,077/- and further was pleased to set aside the penalty under Section 76 and reduced the penalty to the proportionate amount of tax under Section 78. Being aggrieved the appellant is in appeal before this Tribunal.

4. Heard the parties.

5. Having considered the rival contentions, I find that the appellant had neither charged service tax in its bills nor the same was paid by the principal. Further the stand taken by the appellant that the default was only due to lack of knowledge and there was no contumacious conduct and/or suppression with intent to evade Service Tax, have not been found untrue in the impugned order. Under the facts and circumstances, I hold that the appellant is entitled to the benefit under Section 73(3) of the Finance Act as the tax and interest had been paid under proper intimation. In this view of the matter the penalty retained under Section 78 and Section 77 are set aside. The appellant will be entitled to refund of the excess tax deposited and will also be entitled to refund of the proportionate interest on the excess deposit of tax and penalty if any deposited. I further direct the concerned authorities to refund the same to the appellant within a period of 2 months from the date of receipt of a copy of this order.

6. Thus, the appeal is allowed with consequential benefits.

(Pronounced in open Court)

(Anil Choudhary)

Member (Judicial)

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