R.P. Shah vs Commissioner Of Central Excise
- CitationAppeal No. ST/197/10
Ratio decidendi
The rule this decision rests on
The desilting of a river bed carried out under a Government contract is a taxable service under the category of dredging services, and liability to pay service tax on it is established where the issue is squarely covered by the Tribunal's earlier decision in Reliance Michigan (JV) v. CCE Thane II, which the Bench follows. A penalty under Section 77 of the Finance Act, 1994 for non-compliance with the procedural requirements of the service tax regime is sustained where the same Tribunal has already upheld it in the earlier decision on identical facts. Penalties under Sections 76 and 78 of the Finance Act, 1994 for evasion of service tax are not sustainable where there is no suppression of facts or mis-statement with intent to evade, the contract having been awarded by the Government and the transaction being in the public domain, and the non-payment being attributable to a mis-interpretation of the provisions of the Act; in such circumstances the penalties are set aside by invoking Section 80 of the Finance Act, 1994 as it stood during the relevant period.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT No. I
Appeal No. ST/197/10
(Arising out of Order-in-Original No. 02/KLG/Th-II/2010 dated 21.01.2010 passed by Commissioner of Central Excise, Thane)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, 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?
R.P. Shah Appellant Vs.
Commissioner of Central Excise, Thane II Respondent
Appearance:
Shri Shailesh Sheth, Advocate for appellant Shri S.V. Nair, Supdt. (AR) for respondent
CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)
Date of Hearing: 16.04.2015 Date of Decision: 16.04.2015
ORDER NO Per: M.V. Ravindran
This appeal is directed against order-in-original 02/KLG/Th-II/2010 dated 21.01.2010.
2. Heard both sides and perused the records.
3. The issue involved in this appeal is regarding the service tax liability on the appellant under the category of dredging services. The appellant had undertaken desilting of Mithi River.
4. Learned Counsel submits that on merits the issue has been decided by this Bench in the case of Reliance Michigan (JV) v. CCE Thane II 2014 (35) STR 620 (Tri. Mum). It is his submission that despite that he has got submissions to make which were not made before the Bench. It is his submission that the desilting activity undertaken by the appellant is not in respect of river. He would trace the history back and submit that the so called Mithi River was nothing but a water body and that also not perennial and runs only during monsoon. He would submit that the water body is draining of water from man-made i.e. Vihar lake, if it over flows, so that the water should be diverted towards the sea. It is his submission that in the case of Reliance Michigan (JV) (supra) the Bench had set aside the penalty. It is his submission that an appeal has been preferred before the Honble Apex Court against the Reliance Michigan (supra) case and the matter is still pending.
5. Learned Departmental Representative submit that the appellant is aware the fact that the service tax liability arises on the activity undertaken by them. Accordingly, they are required to discharge the same. Having not done so, penalties have been correctly imposed on them. It is his submission that there is no interference called for on the penalties imposed by the adjudicating authority.
6. We have considered the submissions made at length by both the sides and perused the records.
7.1 At the outset we hold that the issue is on merits is squarely covered by the judgement of this Bench in the case of Reliance Michigan (JV) (supra). Accordingly, we have no hesitation to hold that the appellant is liable to discharge his service tax liability along with interest thereof.
7.2 As regards the penalty of Rs.1000/- imposed on the appellant under Section 77 of Finance Act, 1994, we uphold the same as has been done by the Tribunal in the case of Reliance Michigan (JV) (supra).
7.3 As regards the penalties imposed under Section 76 and 78 of Finance Act, 1994, we find that the elements of suppression of facts or mis-statement with intent to evade the service tax are absent in this case as the contract of so-called desilting was awarded by the Government of Maharashtra and the entire issue was in the public domain. In our view, non-payment of service tax by the appellant would be due to mis-interpretation of the provisions of the Finance Act, 1994. Accordingly, we, by invoking the provisions of Section 80 of the Finance Act, 1994 as it was during the relevant period, set aside the penalties imposed under Sections 76 and 78 of the Finance Act, 1994.
8. Appeal disposed of as indicated here-in above.
(Dictated in Court)
(P.S. Pruthi) Member (Technical) (M.V. Ravindran) Member (Judicial)
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