M/S.Nayak Paper Industries Pvt.Ltd vs Cce-Bolpur
- CitationAppeal No.ST-75048/13
Ratio decidendi
The rule this decision rests on
A point not raised before the first appellate authority cannot be agitated for the first time before the Tribunal; a ground of non-chargeability on merits, not having been taken in the grounds of appeal before the first appellate authority, is not entertained at that stage. Where the assessee has neither obtained registration nor filed returns within the prescribed period after the relevant statutory event, and the department learns of the non-compliance only through a later audit, the extended period of limitation is validly invoked, and a demand of interest issued within a reasonable period after that is not time barred. Penalties imposed in a composite amount under sections 76, 77 and 78 of the Finance Act, 1994 are not permissible in law; where the liability turned on a disputable question that required a retrospective amendment to resolve, such penalties are not justified and are set aside.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No.200/BOL/2012 dated 8.10.2012 passed by the Commissioner(Appeals) of Central Excise, Kolkata-III.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER(TECHNICAL)
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 Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental Authorities?
M/s.Nayak Paper Industries Pvt.Ltd.
Applicant (s)/Appellant (s)
Vs.
CCE-BOLPUR
Respondent (s)
Appearance:
Shri Laxmi Kanta Pal & Shri Bandhu Brata Bhula, Advocates for the Appellant
Shri S.K.Naskar, AC(AR) for the Revenue (s)
CORAM:
Honble Shri H.K.Thakur, Member(Technical)
Date of Hearing/Decision :- 21.8.2015 Date of Pronouncement :- 21.8.2015
ORDER NO.FO/A/75462/2015
Per Shri H.K.Thakur.
This appeal has been filed by the appellant against Order-in-Appeal No.200/BOL/2012 dated 8.10.2012 passed by the Commissioner(Appeals) of Central Excise, Kolkata-III as first appellate authority under this Order-in-Appeal dated 8.10.2012. First appellate authority has upheld the Order-in-Original No.135/AC/BDN/ST/NPI/2007-08 dated 28.3.2008 passed by Adjudicating authority.
2. Shri Laxmi Kanta Pal (Advocate) and Bandhu Brata Bhula (Advocate) appeared on behalf of the appellant. Advocate appearing on behalf of the appellant argued that service tax was not payable on merits. That demand of interest by way of a corrigendum dated 21.7.2008 is not justified. It was strongly argued by the learned Advocate that show cause notice has been issued 2 years, 7 months & 26 days of the Finance Bill 2003 after having received the assent of President of India and is clearly time barred. Regarding penalty it was argued that as the matter was disputable and a retrospective amendment was carried out, therefore, penalties under section 76, 77 & 78 cannot be imposed. Appellant relied upon the case law of Shalimar Paper Mills (P) Ltd. v. CCE, Meerut-II [2006 (1) STR 22 (Tri.Del.].
3. Shri S.K.Naskar, AC(AR) on the other hand argued that appellant did not get service tax registration and also did not file return within six months after the retrospective amendment for the assent of President to the Finance Bill 2003. That in the circumstances extended period will be applicable and demand of interest will not be time barred.
4. Heard both sides and perused the case records. It is observed from the case records that appellant has not agitated the issue of payment of tax on merits before the first appellate authority. As per para 3 of the order-in-appeal dated 8.10.2012 appellant has only taken the ground of time barred in the grounds of appeal before the first appellate authority. Therefore, raising the ground for non-chargeability of tax on merits cannot be entertained at this stage.
4.1 So far as invocation of extended period is concerned it is observed that appellant did not obtain registration during the relevant period. Secondly it has been correctly observed by the first appellate authority in para 6 of the Order-in-Appeal dated 8.10.2012 that appellant also did not file return within 6 months from the date when Finance Bill, 2003 received assent from the President of India i.e. 13.5.2003. This fact was known to the department only when audit was done by the officer of the department after appellant obtained registration. In view of the factual matrix extended period has been correctly invoked and demand is not time barred. Interest demanded from the appellant is payable as a demand issued within a reasonable period.
4.2 Regarding imposition of penalty it is observed that the Adjudicating authority has imposed a composite penalty of Rs.97,755/- under sections 76, 77 & 78 of the Finance Act, 1994 which is not permissible under the law. Further the issue of payment of service tax on the transportation services was disputable and that is why a retrospective amendment was required to be carried out. Under these facts penalties imposed upon the appellant are not justified and are required to be set aside.
5. Appeal filed by the appellant is allowed only to the extent indicated in para 4.2 above.
(Operative part of the order was pronounced in the open court.)
SD/
(H.K.THAKUR) MEMBER(TECHNICAL) sm
4 Appeal No.ST-75048/13
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