M/S. Saraswathi Udyog India Ltd vs Commissioner Of Central Excise, Salem
- CitationAppeal No.02/2013-ST
Ratio decidendi
The rule this decision rests on
Where an assessee discharges a service tax liability together with interest once the shortfall is pointed out by audit, without disputing the liability, and the show-cause notice does not establish a deliberate intention to evade, and the law was in a state of confusion, the penalty may be waived under Section 80 of the Finance Act, 1994, as a reasonable cause for the failure to pay.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.02/2013-ST, dated 30.01.2013 passed by the Commissioner of Central Excise (Appeals), Salem]
M/s. SARASWATHI UDYOG INDIA LTD. APPELLANT
Versus
COMMISSIONER OF CENTRAL EXCISE, SALEM RESPONDENT
Appearance:
For the Appellant Shri S. Raghu, Adv.
For the Respondent Shri L. Paneerselvam, AC (AR)
CORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision 02-03-2015
FINAL ORDER NO. 40227 / 2015
Shri S Raghu, learned counsel submits that the shortfall in payment of tax was made good as soon as the audit pointed out without disputing the tax liability. Not only tax was paid but also interest liability was discharged. Such conduct of the assessee may not be construed to be an act of causing evasion deliberately. Since GTA issue was in dispute for a long time travelling to various Judicial forums that which created confusion to the assessees. He points that even Section 73 itself does not require imposition of penalty in the event an assessee comes forward to discharge its liability with interest. He also submits when the matter was settled soon after the observation of the audit, there should not have been a show-cause notice issued. Therefore, not only the stay application may be disposed but appeal may also be disposed.
2. Revenue submits that both the authorities below have rightly passed the order dismissing prayer of the appellant.
3. Heard both sides and perused the records.
4. The appellant has not disputed service tax liability. It discharged the same with interest. The show-cause notice does not bring out deliberate intention of the appellant causing evasion. Therefore, learned counsel is correct to submit that when law was in confusion stage and appellant has complied with the law, there should not be levy of penalty on him. Considering the reason advanced by learned counsel, section 80 of the Finance Act, 1994, is applied and the penalty imposed is waived. Appeal is thus allowed on penalty, so also the stay application stands disposed. (Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
ksr 09-03-2015
DRAFT Remarks
I II III
Date of dictation 02.03.2015
Draft Order - Date of typing 03.03.2015
Fair Order Typing 09.03.2015
Date of number and date of dispatch 11.03.2015
2 ST/S/40626/2013 and ST/40920/2013
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