M/S. Rohit Ferro Tech Ltd vs Commr. Of Central Excise, Bolpur

(Arising out of the Order-in-Appeal No.222/Bol/2012 dated-07/11/2012 passed by the Commissioner (Appeal-III), Central Excise, Kolkata) For approval and signature of:

SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER

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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. Rohit Ferro Tech Ltd. APPELLANT(S) VERSUS Commr. of Central Excise, Bolpur

RESPONDENT(S)

APPEARANCE

Sri A.K. Bhattacharjee, Consultant FOR APPELLANT(S) Sri S. P. Pal, Appraiser (A.R) FOR THE RESPONDENT(S)

CORAM: SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER

DATE OF HEARING : 18/09/2015

ORDER NO : FO/A/75505/2015 Per SHRI H.K. THAKUR

This appeal has been filed by the appellant against Order-in-Appeal No.222/Bol/2012 dated-07/11/2012 passed by Commissioner of Central Excise (Appeals-III), Kolkata as first appellate authority under which Order-in-Original dated-27/02/2009 passed by the Adjudicating authority has been upheld.

2. Shri A.K. Bhattacharjee (Consultant) appearing on behalf of the appellant argued that penalties of Rs.1,05,659/- & Rs.1,000/- have been imposed upon the appellant by the Adjudicating authority under Section 78 & 77 respectively of the Finance Act, 1994. That in addition Service Tax demand of Rs.1,05,659/- has also been confirmed by the Adjudicating authority when no such demand was made under the show cause notice dated-20/11/2008. Learned Consultant relied upon the case law of C.C. Bangalore Vs. Siddaganga Cements (P) Ltd. [2010 (262) ELT 495 (Tri-Bangalore) to argue that when duty is not demanded in the show cause notice then equivalent penalty cannot be imposed under Section 78 of the Finance Act, 1994. It was further argued by the Learned Consultant that period of demand is 200607 and appellant was required to pay duty under reverse charge for the services obtained from overseas service providers. It was his case that tax payment on reverse charge mechanism under Section 66A of the Finance Act, 1994 was introduced w.e.f. 18/4/2006. That reverse charge mode of payment was new and the entire service tax & interest was paid before the issue of show cause notice as soon as the same was pointed out to the appellant. That as per Section 73 (3) of the Finance Act, 1994 there was no need of issuing a show cause notice. That appellant is a manufacturer and was entitled to CENVAT Credit and that there cannot be any intention to evade payment of service tax for imposing Section 78 penalty.

3. Shri S.P. Pal, Appraiser (A.R.) appearing on behalf of the Revenue confirms that entire tax was paid before the issue of show cause notice and that no service tax has been demanded in the show cause notice. It was his case that for imposing penalty under Section 77 of the Finance Act, 1994 intention to evade payment of service tax is not necessary and thus strongly defended the orders passed by the lower authorities.

4. Heard both sides and perused the case records. In the present case appellant argued that entire service tax and interest was paid by the appellant before issue of show cause notice. However, from the case records it is observed that only service tax was paid before issue of show cause notice but interest of Rs.1,28, 678/- was paid on 8/1/2009 which after the issue of show cause notice dated-20/11/2008. However, payment of Service Tax on reverse charge basis was introduced under Section 66A of the Finance Act, 1994 w.e.f. 18/4/2006 and appellant was eligible for CENVAT Credit. As such, no intention to evade payment of service tax can be attributed on the part of the appellant and no such allegations have been made in the show cause notice . Even no demand of service tax has been made against the appellant in show cause notice dated 20/11/2008 invoking extended period. As the ingredient contained in Section 78 of the Finance Act, 1994 are not satisfied, therefore, penalty imposed upon the appellant under Section 78 of the Finance Act, 1994 is set aside.

5. Appeal filed by the appellant is allowed only to the extent indicated above.

(Operative part of the order already pronounced in the Court) Sd/- 21/9/15 (H.K. THAKUR) Technical Member

k.b/-

Service Tax Appeal No. ST/75050/2013

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