M/S Saibaba Telefilms Pvt. Ltd vs Commissioner Of Service Tax

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. I

Appeal No. ST/23/09

(Arising out of Order-in-Original No. 31/STC/BR/08-09 dated 5.11.2008 passed by Commissioner of Service Tax, Mumbai)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================

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 Saibaba Telefilms Pvt. Ltd. Appellant Vs.

Commissioner of Service Tax, Mumbai Respondent

Appearance:

Shri D.B. Shroff, Sr. Advocate for appellant Shri S.V. Nair, Supdt. (AR) for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing: 28.07.2015 Date of Decision: 28.07.2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against order-in-original No. 31/STC/BR/08-09 dated 5.11.2008.

2. The issue involved in this case is regarding the service tax liability on the appellant under the category of Programme Producers Service. The appellant herein had produced a programme i.e. Antakashari for Star India and received consideration from them but did not discharge the service tax liability. The said evasion of the service tax liability was noted by the department and on being pointed out the appellant paid the service tax liability along with interest which has been accepted by the adjudicating authority. The adjudicating authority after following due process of law adjudicated the show-cause notice issued to appellant by confirming the demands raised along with interest, appropriated the amounts paid by the appellant against the demands and interest. He imposed penalties under Section 76 and 78 of the Finance Act, 1994.

3. Learned Counsel appearing on behalf of appellant would take us through the entire case records. While bringing to our notice the period involved in this case i.e. service tax for the period February to August 2007, the Counsel would submit that show-cause notice was issued on 08.10.2007. He would submit that for the period from 31.03.2006, appellant is required to file the returns by 25.04.2007 and for the period April 2007 to September 2007, appellant is required to file the service tax returns by 25.10.2007. It is his submission that specific dates are mentioned for the purposes of claiming of relief of non-imposition of penalty under Section 80 of the Finance Act, 1994 as there cannot be any suppression of fact with inTent to evade service tax; appellant had filed the returns with the authorities but due to financial crisis could not deposit the amount with the Central Government. He would bring to our notice the findings recorded by the adjudicating authority on this point. He would submit that the appellant having discharged the entire service tax liability and the interest thereof, pleads leniency from imposition of penalties.

4. Learned D.R. reiterated the findings of the adjudicating authority. He would submit that the adjudicating authority has categorically recorded that the appellant had received the value of taxable service along with service tax and despite that had not deposited the amount of service tax with the Govt. of India. It is his submission that the financial crisis cannot be a reason for delay in payment of tax. It is his submission that appellant had utilized the service tax amount collected from the client for their business purposes which attracts penal action.

5. We have considered the submissions made at length by both sides and perused the records.

6. Learned Sr. Counsels argument as the appellant is not required to discharge any service tax liability on the amount received by them under the category of programme producer service by referring to the agreement between appellant and Star India is not acceptable to us for the simple reason as the agreement entered by appellant with Star India very categorically STATES that appellant was commissioning for producing the programme Antakashari for Star India. In view of this we hold that the service tax liability and interest thereof are correctly determined by the adjudicating authority and we also note that the appellant is not seriously contesting the service tax liability.

6.1 As regards the penalties imposed under Section 76 and 78 of the Finance Act, 1994 we find that appellant had in fact filed ST-3 returns for the period February to March 2007 and from April to September 2007 tO the authorities, indicating therein the taxable services provided by them and the service tax amount charged and collected by them from service recipient. In our view the penal provisions of Section 76 and 77 would be clearly applicable in the facts and circumstances of this case. The adjudicating authority is correct in invoking the provisions of Section 76 and 77 for imposing the penalties. We do not find any reason to interfere in such an order of the adjudicating authority accordingly we uphold that imposition of penalties under Section 76 and 77 of the Finance Act, 1994. To that extent the appeal stands rejected.

6.2 As regarding the penalty imposed under Section 78 of the Finance Act, 1994 we find that the adjudicating authority in the impugned order at para 4.6 has categorically recorded that the appellant had reflected the amounts collected by them as service tax in their Books of Accounts. If appellant had recorded the amount in their Books of Accounts as service tax collected by them and filed returns indicating therein the amounts involved as service tax, it cannot be said that the provisions of Section 78 of the Finance Act would be applicable in as such there is no intention to evade service tax liability. In our view the provisions of Section 78 do not get attracted in the case in hand. Accordingly, we by invoking the provisions of Section 80 of the Finance Act, 1994, set aside the penalty imposed by the adjudicating authority under Section 78 of the Finance Act, 1994.

7. The appeal is disposed of as indicated herein above.

(Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

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1 5 Appeal No. ST/23/09