M/S Shiv Engineering vs Commissioner, Customs & Central Excise

Appeal No.ST/10330/2014-SM [Arising out of OIA No.VAD-EXCUS-001-APP-464-13-14, dt.21.10.2013, passed by Commissioner (Appeals), Customs, Central Excise & Service Tax, Vadodara]

M/s Shiv Engineering Appellant

Vs

Commissioner, Customs & Central Excise, Vadodara-I Respondent

Represented by:

For Revenue : Shri Jitendra Nair, Authorized Representative For Assessee: Shri Paritosh Gupta, Advocate

For approval and signature:

Mr. P.K. Das, Honble Member (Judicial)

1. Whether Press Reporters may be allowed to see the No 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 Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

MR. P.K. DAS, HONBLE MEMBER (JUDICIAL)

Date of Hearing/Decision:30.01.2015

Order No. A/10091 / 2015, dt.30.01.2015

Per: P.K. Das

1. The Appellant filed this appeal against the demand of Service Tax of Rs.8,62,338.00 alongwith interest and penalty of equal amount under Sections 78, 76, 77 (1)(b), 77(1)(C) of the Finance Act, 1994 and Rule 7C of Service Tax Rules, 1994 separately. The tax was demanded under the category of Maintenance or Repair Service for the period April 2006 to March 2011.

2. Learned Advocate fairly submits that they are not contesting the demand of Service Tax on merit. He submits that the demand is hit by limitation and penalties are liable to be set aside on the ground that the Appellant acted on bonafide belief. He submits that without prejudice, the Appellant already paid the entire amount of tax along with interest and therefore, penalties should be set aside. He further submits that as per law, they are not liable to pay the tax on material portion.

3. On the other hand, the learned Authorized Representative for the Revenue submits that the Appellant had collected the tax from their clients and had not deposited with the Government. It is also submitted that the Appellant had obtained registration certificate from Service Tax Department in February 2007 and had not filed ST-3 return.

4. After hearing both the sides and on perusal of the records, I find that the Appellant obtained the Service Tax registration in February 2007 and had not filed ST-3 return. It is not clear, why the Department had not taken any steps for non-filing of the ST-3 return. Shri Dinkar Brijnath Pandey, Proprietor of the Appellant Firm in his statement dated 28.12.2011 stated that they were issuing invoices to the various contractors without charging and collecting Service Tax till February, 2007 and started charging/collecting Service Tax after obtaining Service Tax registration in February, 2007. There is no dispute of demand of tax on merit

5. The learned Advocate attempted to refute the contents of the statement of the Applicant, by placing a copy of Bill to substantiate that no tax was charged. I find that the Appellants had not taken this stand before the lower authorities. This document was not placed before the lower authorities and the same cannot be accepted at this stage. I find that the Appellants already paid the entire amount of tax before issue of Show Cause Notice. They have also collected the Service Tax amount from the customers and not deposited in Central Government account, therefore, penalty under Section 78 is warranted. It is clear case of suppression of facts with intent to evade payment of tax and extended period of limitation would be involved.

6. Taking into account overall facts and circumstances of the case, in my considered view, the penalties imposed under other Sections are not warranted. The Tribunal in the case of Prompt Services Vs CCE Bolpur  2011 (23) STR 523 (Tri-Kolkata) on the identical issue held that penalty only under one Section is sufficient and adequate deterrent.

7. In view of above discussion, the demand of Service Tax alongwith interest and the penalty under Section 78 are upheld and other penalties set aside. The appeal filed by the Appellant is disposed of in above terms.

(Dictated & Pronounced in Court)

(P.K. Das) Member (Judicial)

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