M/S S.K. Financial Services vs C.C.E., Kanpur

(Arising out of the Order-in-Appeal No. 264/ST/APPL/KNP/2010 dated 18/05/2010 passed by the Commissioner (Appeals), Customs & Central Excise, Kanpur).

For approval and signature:

Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of 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 S.K. Financial Services . Appellant

vs.

C.C.E., Kanpur .... Respondent

Appearance:

Shri Anurag Kapur (Advocate) - for the appellant

Shri B.B. Sharma, A.R. for the Respondent/Revenue

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

Final Order No. 52213/2015 dated 10/07/2015

Per. H.K. Thakur :-

This appeal has been filed by the appellant against OIA No. 264/ST/APPL/KNP/2010 dated 18/05/2010 passed by Commissioner (Appeals), Kanpur.

2. Shri Anurag Kapur (Advocate) appearing on behalf of the appellant argued that Appellant is not agitating payment of service tax w.e.f. 01/5/2006 when Section 65 (105) (zzb) of the Finance Act, 1994 was amended. That appellant is a proprietary concern and before 01/5/2006 the words a commercial concern was existing in Section 65 (105) (zzb) in place of the word any person. That as per CBEC Circular No. 62/11/2003 dated 21/8/2003 also no service tax was required to be recovered from individuals. For the period from 01/5/06 appellant fairly agreed that service tax was required to be paid and that the same is not being agitated on merits. However, he argued that provisions regarding applicability of extended period and penalties are not attracted for the demand from 01/5/2006 onwards.

3. Shri B.B. Sharma (AR) appearing on behalf of the Revenue argued that there was no confusion in the taxing provisions under Service Tax Statutory provisions after 01/5/2006, therefore extended period was attracted and penalties have been correctly imposed. Learned AR strongly defended the orders passed by the lower Authorities.

4. Heard both sides and perused the case records. On chargeability of service tax appellant is not agitating the issue on merits w.e.f. 01/5/2006. For the period before 01/5/2006 it is the case of the appellant that the word any person was mentioned in the definition of Busines Auxiliary Service under Section 65 (105) (zzb) only w.e.f. 01/5/2006. On verification of the case records we find it so and hold that individuals cannot be subjected to service tax under Business Auxiliary Services upto 01/5/2006. Demand for the period prior to 1/5/2006 is, therefore, required to be set aside and we accordingly hold so.

4.1 So far as imposition of penalties w.e.f. 01/5/2006 are concerned it is observed that there was no ambiguity or confusion with respect to interpretation of Business Auxiliary Services after 01/5/2006 and liability of the appellant to discharge service tax was expected to be known to appellant as ignorance of law is no excuse. Appellants argument that there was no positive act of defiance and hence extended period is not applicable, is not acceptable as no ambiguity in payment of tax was existing from 01/5/2006. Demand for the period from 01/5/2006 onwards is payable by the appellant, with interest, as extended period has to be held as applicable for the period 01/5/2006 onwards. Penalties are also attracted against the appellant for the period from 01/5/2006.

5. Appeal filed by the appellant is allowed for the period prior to 01/5/2006 and stand rejected for the period from 01/5/2006 onwards as per observations made in para 4.1 above.

(Operative part of the order pronounced in the open court.)

andl

(Justice G. Raghuram)

President

(H.K. Thakur)

Technical Member

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