M/S. Kashyap Publications Pvt. Ltd vs Commissioner Of Central Excise

Customs Excise and Service Tax Appellate Tribunal27 January 2015

CitationService Tax Appeal No. 54973 of 2014 - ST (SM)

Ratio decidendi

The rule this decision rests on

Where a assessee bona fide believed that its taxable turnover fell below the threshold for registration and liability under reverse charge, and it took registration and paid the tax with interest on discovering its liability, no show cause notice under section 73(3) of the Finance Act, 1994 was required, and penalties under sections 70 and 77 for failure to register and to furnish returns are not imposable on that account. Penalty under section 78 stands on a different footing: where the assessee does not contest a penalty under section 78, the benefit of the order does not extend to that penalty.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE AND SERVICE TAXAPPELLATE TRIBUNAL, NEW DELHIPRINCIPAL BENCH, COURT NO. IIService Tax Appeal No. 54973 of 2014 - ST (SM)

[Arising out of Order-In-Appeal No. IND/CEX/000/APP/127/2014 dated 30/06/2014 passed by Commissioner of Central Excise, & Customs & Service Tax, Indore. ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Kashyap Publications Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Service Tax, Indore

Appearance:

Shri Manoj Chouhan, Chartered Accountant for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 27.1.2015

FINAL ORDER NOS. A/ 50289 /2015-ST(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order imposing penalties under section 70 and 77 of the Finance Act, 1994.

2. The facts of the case are that the appellant is a manufacturer of excisable goods and they are availing goods transport agency services but they are not paying service tax on reverse charge mechanism. Later on, they took registration on 3.1.2012 and started paying service tax on goods transport agency services on reverse charge mechanism. Investigation was conducted on 8.2.12 and it was found that during the period 2007 to 2012, the appellant has not paid Service tax under reverse charge mechanism on goods transport agency services. Therefore, show cause notice was issued to demand service tax along with interest and for imposition of various penalties. The show cause notice was adjudicated. The service tax paid by the appellant along with interest was appropriated and penalties under section 70, 78, and 77 were imposed. The appellant paid the penalty under section 78 also but is contesting the penalties imposed under section 70 and 77 of the Act.

3. Learned Consultant for the appellant submits that appellants were under bonafide belief that as their total turn over is less than Rs.10 lakhs for goods transport agency service, therefore they are not required for registration. In these facts and circumstances, they did not take registration in time and did not pay the service tax. When they released that they are required to pay service tax, immediately they took the registration and paid service tax with interest. In these circumstances, the show cause notice was not required to be issued as per Section 73 of the Act. In these circumstances, penalties should be set aside.

4. On the other hand, learned AR reiterated the finding of the impugned order and submits that in this case as appellant did not take registration in time and did not pay service tax, therefore they are to be penalized as per the impugned order.

5. Heard both sides and considered the submissions.

6. It is admitted fact that on 13.1.12 appellant took registration and paid service tax along with interest, not for the period in question but for 2006 also. This shows the appellant were under the bonafide belief that they are not liable to pay service tax under reverse charge mechanism as good transport agency service does not exceed Rs.10 lakhs. Therefore, I hold that the show cause notice was not required to be issued under section 73(3) of the Finance Act, 1994. In these circumstances, penalties are not imposable on the appellant. Further, I find that appellant is not contesting the penalty imposed under section 78 of the Act. Therefore the benefit of this order will not be available for the penalty imposed under section 78 of the Act. In these circumstances, the penalties imposed on the appellant under section 70 and 77 are set aside. Appeal is allowed in these terms.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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