M/S. Pushpanjali Travels vs Commissioner Of Ce & Customs
- CitationAppeal No. ST/44/10
Ratio decidendi
The rule this decision rests on
Where the tax liability is admitted and deposited, the service tax demand is upheld and interest accrues automatically on the delayed payment, payable within 30 days of the lower authority's intimation of the amount. Where the classification of the service was a genuinely contested question not decided by any forum during the material period, the assessee may entertain a bona fide belief that no service tax liability arose, and on such peculiar facts the penalty may be set aside by invoking the protection of Section 80 of the Finance Act, 1994.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT No. I
Appeal No. ST/44/10
(Arising out of Order-in-Appeal No. AKP/106/NSK/2009 dated 19.11.2009 passed by Commissioner of Central Excise & Customs (Appeals), Nashik)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)
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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 : No 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. Pushpanjali Travels Appellant Vs.
Commissioner of CE & Customs, Nagpur Respondent
Appearance:
Shri Venkatesh Iyer, Consultant for appellant Shri A.B. Kulgod, Asst. Commissioner (AR) for respondent
CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)
Date of Hearing: 04.06.2015 Date of Decision: 04.06.2015
ORDER NO
Per: M.V. Ravindran
This appeal is directed against Order-in-Appeal No. AKP/106/NSK/2009 dated 19.11.2009.
2. The issue involved in this case is regarding the service tax liability for the services rendered by the appellant to M/s BSNL and M/s. Arogya Vidyapeeth under the category of Rent-a-Cab service during the period 2003-04 to 2006-07.
3. Heard both sides and perused the records.
4. The appellant had contested the issue before the first appellate authority on limitation as well as on merits. On limitation, it is the case that they had filed regular Returns with the authorities and during the period in question, ST-3 form did not require declaration of value of exempted services rendered by an assessee and the change in ST-3 form came into statute from 01.04.2007.
4.1 It is also the case of the appellant before us that the issue is hit by limitation and that the decision in the case of M/s. R.S. Travels 2008 (07) LCX0022 and M/s Kuldip Singh Gill 2006 (003) STR 68 squarely covered the issue in favour of the appellant. Learned Advocate appearing for the appellant also brought to our notice that the issue is now covered by the decision of the Honble High Court of Allahabad in the case of CC vs. M/s. Monsanto Manufacturer Pvt. Ltd. 2014-TIOL-550-HC-ALL-ST.
4.2 It was also brought to our notice that the appellant has already discharged the service tax liability and has not deposited the interest as there is no computation of interest and submits that the penalty be set aside; it was also submitted that the appellant is ready to deposit the interest as and when the department informs them about the correct amount.
5. Without going into merits of the case, since the appellants Counsel has fairly submitted that they do not want to contest the issue on merits and they have deposited the entire amount of service tax liability, we uphold the said liability of service tax. Since there is a delay in depositing the service tax liability, the interest liability automatically arises, accordingly the appellant is required to discharge the interest on such amount within 30 days from the date on which the lower authorities inform about the interest liability.
5.1 This takes us to the penalties imposed by the adjudicating authority and upheld by the first appellate authority. In our considered view, the issue whether the services rendered by the appellant in providing cabs to various authorities would fall under the category of Rent-a-Cab service or otherwise, was an issue which was being agitated before various forum during the material period in this appeal. Since the issue was not decided, the appellant could have entertained a bonafide belief as to that they are not required to discharge any service tax liability. Keeping in mind the peculiar facts and circumstances of the case, we find that this is a fit case for invoking the provisions of Section 80 of the Finance Act, 1994 and set aside the penalty imposed on the appellant.
6. Penalties are set aside. The appeal is disposed of as indicated herein above. (Dictated in Court)
(P.S. Pruthi) Member (Technical) (M.V. Ravindran) Member (Judicial)
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