M/S. M.R. Mahana vs Commissioner Of Central Excise, Nashik

[Arising out of Order-in- Appeal No. RPS/94/NSK/2012 dtd. 19/11/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Nashik]

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?

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M/s. M.R. Mahana : Appellant

VS

Commissioner of Central Excise, Nashik : Respondent

Appearance

Shri. Keval Shah, CA for the Appellant Shri. S.V. Nair, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 9/1/2015 Date of decision: 9/1/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. RPS/94/NSK/2012 dtd. 19/11/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Nasik, wherein the Ld. Commissioner(Appeals) rejected the appeal filed by the appellant and maintained the order-in-original. The fact of the case is that the appellant engaged in providing taxable service in relation to Commercial or Industrial Construction as defined in Section 65(105) (zzq) of the Chapter V of Finance Act, 1994 and Chapter VA of Finance Act, 2003, as amended. During the audit of the records of M/s. Hindustan Aeronautics Ltd., it was noticed that HAL had paid certain amount to the appellant towards Commercial or Industrial Building construction during the period 2005-06 to 2008-09 and amount of Rs. 69.47,587/- was received for the said services. A show cause notice dated 19/9/2011 was issued proposing recovery of service tax along with interest and imposition of penalty under section 76, 77 and 78 of Finance Act, 1994. In the adjudication the adjudicating authority confirmed the demand of service tax of Rs. 3,43,542/- and imposed penalty of Rs. 10,000/- under Section 77, Rs. 1,60,000/- under Section 70, Rs. 3,43,542/-uder Section 78 and also demanded the interest on the Services Tax not paid. Aggrieved by the said order the appellant filed an appeal before the Commissioner (Appeals) challenging the imposition of penalty of under Section 77, 78 and 70. The Ld. Commissioner(Appeals) has rejected the appeal vide order dated 19/11/2014. Dissatisfied with the said order, the appellant is before me.

2. Shri. Keval Shah, Ld Counsel for the appellant submits that the appellant had no malafide intention in non payment of service tax as they were providing service to the Government undertaking i.e. M/s. Hindustan Aeronautics Ltd and data related to that services were very much available on record. It is his submission that as regard providing service of road construction they are under impression that their services are not taxable. He further submits that entire service tax alongwith interest were paid prior to issuance of show cause notice and even 25 % penalty was also paid within the stipulated time of one month from the receipt of adjudication order. As regard alleged offence that statutory return not filed in time, he submits that the appellant could not have filed return prior to obtaining service tax registration, immediately after taking registration return has been filed. It is his submission that entire period covers in this case were also disclosed in the return after obtaining the registration. He submits that the appellant already been penalized for not obtaining the registration for Rs. 10,000/- which was admittedly paid and not disputed. With all these facts the appellants intention was bonafide and therefore additional penalty of Rs. 1,60,000/- for not filing the return should not have been imposed. He placed reliance on judgment [2014-TIOL-1939-CESTAT-AHM] M/s. Baroda surface protection services Vs. CCE&ST, Vadodara.

3. Shri. S.V. Nair, Ld. Asst. Commissioner (A.R.) appearing for the Revenue reiterates the findings of the impugned order. He further submits that as per the Section 70, penalty was provided for non-filing of return. It is admitted fact that the appellant has failed to comply the provision of filing the return. Therefore both the lower authorities are correct in imposition of penalty of Rs. 1,60,000/-. He prays to dismiss the appeal.

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

5. I find that the appellant is not disputing the levy of service tax and payment thereof alongwith interest and they also not disputed the penalty of 25% under Section 78 and penalty of Rs. 10,000/- imposed for non obtaining the service tax registration. From the facts I find that the appellant admittedly paid service tax and interest before issuance of show cause notice and 25% penalty within the stipulated time period of 1 month. The penalty of Rs. 1,60,000/- imposed under Section 70, Finance Act, 1994, which is extracted below;-

SECTION [70. Furnishing of Returns. - (1) Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency [and with such late fee not exceeding twenty thousand rupees, for delayed furnishing of return, as may be prescribed] [(2) The person or class of persons notified under sub-section (2) of section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.] From the reading of the subsection (1) of Section 70, I observe that quantum of penalty i.e. Rs. 20,000/- is not a fixed amount of penalty provided for not filing the return. The amount of the said penalty is not mandatory. Considering the quantum of the penalty and overall facts and circumstances of the case, I am of the view that appellant certainly deserve for relief in the penalty imposed by the lower authority. I therefore reduced the penalty of Rs. 1,60,000 to Rs. 50,000/-. The appeal is partly allowed in the above terms.

(Dictated in court)

Ramesh Nair Member (Judicial))

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