P.R.Enterprises vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PII/AV/36/2011 dated 29-04-2011 passed by Commissioner of Central Excise (Appeals), Pune-II.)

For approval and signature:

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

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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?

====================================================== P.R.Enterprises Appellant Vs. Commissioner of Central Excise, Kolhapur Respondent

Appearance: Shri V.B.Gaikwad, Advocate for Appellant Shri A.B. Kulgod, A. Commissioner (AR), for Respondent

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

Date of Hearing : 08/09/2015 Date of Decision : 08/09/2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against -in-Appeal No. PII/AV/36/2011 dated 29-04-2011.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding the service tax liability under the category of Mining Services, for the period September 2008 to September 2009. Both the lower authorities has come to a conclusion that the appellant had failed to register with the department and failed to pay the service tax liability. It is the case of the counsel for appellant that they were under the bona-fide impression that service tax liability does not arise and as they are located in remote village and for the first time mining activity was under taken by them; also that they were unaware of the provisions of the law, hence there was an error in not discharging the service tax liability, but the same was discharged as soon as it was pointed out to them by the authorities. It is his submission that the penalties imposed by the adjudicating authority and upheld by the first appellate authority be set aside by invoking provisions of section 80 of the Finance Act 1994. Learned departmental representative on other hand would submit that the appellant should have discharged the service tax liability for the material period and should have checked with the departmental Officers as to taxability of his services.

4. On consideration of the submissions made by both sides, we find that the service tax liability and the interest thereof under the category of Mining Services for the period September 2008 to September 2009 is correctly confirmed and upheld, we do not find any reason to interfere on such demands being confirmed; also that appellant is not seriously contesting the issue on merits.

5. As regards the penalties imposed, we find from the records that statements of the partner of the appellant was recorded on 2nd February 2010, wherein the partner has specifically recorded that since they were located at remote Village, they were not aware about the legal provisions and that they being farmers, and the Mining activity having been undertaken for the first time by them, they failed to discharge the service tax liability; that the service tax liability has been discharged subsequently and had sought leniency in non imposing the penalties. We find that there is no dispute as to the facts as the appellant are partnership firm of farmers and are situated in remote area in Ratnagiri district and may not have had access to the legal opinion as to taxability of the services rendered by them. This can be deduced from the statements recorded by the lower authorities. In our considered view, appellant had made out a case for setting aside the penalties, by invoking the provisions of section 80 of the Finance Act 1994.

6. Accordingly, holding that there could be a justifiable cause for non discharge of service tax liability during the material period; invoking the provisions of section 80 of the Finance Act 1994, we set aside the penalties imposed by the lower authorities. The appeal is disposed of as indicated herein above.

(Dictated in Court)

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

akp 1 4 APPEAL No.ST/526/11-Mum