M/S. Jwalla Security Force vs Commissioner Of Service Tax Cell, ...

[Arising out of Order-in-Appeal No. PVR/111/NGP/2012 dtd. 28/9/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur]

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. Jwalla Security Force : Appellants

VS

Commissioner of Service tax Cell, Nagpur : Respondent

Appearance

None for the Appellants Shri S.R. Nair, Examiner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 15/6/2015 Date of decision: 15/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. PVR/111/NGP/2012 dtd. 28/9/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur, wherein Ld. Commissioner (Appeals) upheld the order-in-original dated 19/4/2011 and rejected the appeal of the appellant.

2. The facts of the case is that the appellant engaged in providing security agency services. During the course of checking of records it was observed by the officer that during 2005-06 appellant had short paid service tax Rs. 48,702/-. However, the on pointed out by the department, the appellant vide letter dated 5/3/2010 informed that they have paid service tax outstanding against them. The show cause notice issued to the appellant for appropriation of service tax paid and imposition of penalty. Vide order-in-original, the adjudicating authority appropriated the service tax Rs. 48,702/- and interest paid by the appellant. He has also imposed penalty of Rs. 200 per day during which such failure continues or at the rate of two percent of such tax per month whichever higher starting with first day after due date till the date of actual payment of outstanding amount of service tax under Section 76 of Finance Act, 1994. The penalty of Rs. 5,000/- was imposed under Section 77 and penalty of Rs. 48,702/- was also imposed under Section 78. Aggrieved by the said order-in-original, appellant filed appeal only in respect of penalties imposed on them. The Commissioner (Appeals) rejected the appeal and upheld the order-in-original, therefore aggrieved by the said order in appeal, appellant is before me.

3. None appeared on behalf of the appellant nor any adjournment request is on record. However, written submission was filed requesting to decide the matter on merit. In the said written submission he placed reliance on following judgments:

(a) Sunita Tools Pvt. Ltd. Vs. CCE, Mumbai-II [2015(37) STR 644 (Tri-Mumbai)

(b) Calderys India Refrefactories Ltd. [2014(36) STR 102 (Tri-Mumbai)

(c) CCE, New Delhi Vs. Independent News Services P. Ltd [2011(23) STR 23(Tri.- Del)]

(d) CCE Vs C Ahead Infor Technologies India Pvt. Ltd. [2012(26) STR J25 (Kar)]

(e) CCE, Bangalore Vs Motor World [2012(27) STR 225 (KAR)]

(f) CCE, Bangalore Vs Mater Kleen [2012(25) STR 439 (KAR)]

(g) Bipco Industries (Tools) Pvt. Ltd. Vs. CCE, Daman [2014(35) STR -349 (Tri.- Ahmd)]

4. Shri. S.R. Nair, Ld. Examiner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that as per the appellants ground of appeal before the Commissioner (Appeals) as well as in the present appeal is for the waiver of penalty invoking Section 73(3) of Finance Act, 1994. He submits that show cause notice issued invoking extended period, extended period invoked only when there is suppression of facts, fraud, collusion etc with intent to evade payment of service tax. It is his submission that when the non payment of service tax in this case is due to suppression of fact, collusion, fraud etc, provisions of Section 73(3) has no application in term of Section 73(4). Since in the present case the demand is admittedly for longer period and appellant has paid the same admittedly immunity provided under Section 73(3) cannot be extended to the appellant. Ld. A.R. relied upon judgment of this Tribunal in case of K. Madhav Kamath Brother & Co. Vs. Commr. of C. Ex., Mangalore [2015(38) S.T.R. 249 (Tri- Bang.)], wherein it was held that when the demand is for extended period and the same was not challenged, the appellant conceded suppression of facts with intent to evade payment of service tax, therefore penalty under Section 78 is rightly imposable.

5. I have carefully considered the submissions made by both sides and perused the record.

6. I find that the short payment of service tax amounting to Rs.48,702/- was pointed out by the service tax department during audit of the appellants record such as balance sheet, profit and loss account and ST 3 return. The short payment is due the differences between income shown in balance sheet for the year 2005-06 and ST 3 returns. I find that since actual income was declared in the books of account cannot be intention for evasion of Service Tax. Moreover the appellant paid service tax alongwith interest before issuance of show cause notice. In this case merely because the appellant is not challenging extended period cannot be said that they have admitted the suppression of facts. The appellant time and again before lower authority and as well as before this Tribunal contesting the penalty only on ground that there is no suppression of fact with intent to evade payment of service tax. I am of the opinion that the appellant is having better conduct as compared to the assessees who never pay the service tax and contest service tax as well as penalties only for sake of litigate matter and evade payment of service tax. Therefore, in my view, when the service tax alongwith interest has been paid before issuance of show cause notice and the service income was declared in the books of account, it cannot be a case of suppression of facts. I take support of the Honble Karnataka High Court judgment in the case of CCE Vs. Ahead Infor Technologies India Pvt. Ltd.(supra). In view of the above judgment, since the appellant have paid service tax alongwith interest before issuance of show cause notice and the details were correctly declared in the books of accounts. I find that appellant has made out case for immunity in terms of 73(3) of Finance Act, 1994. In view of my above discussion, I set aside the penalties under Section 76, 77 and 78. However demand of service tax and payment thereof alongwith interest is upheld. The appeal is allowed in the above terms.

(Dictated in court)

Ramesh Nair Member (Judicial) sk

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