Shri Mahesh Kumar Sharma vs C.C.E., Raipur

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes

Appeal No. ST/60627/2013-ST[SM]

[Arising out of Order-in-Appeal No.142(ST)/RPR-I/2013, dated 30.08.2013 passed by the C.C.E.(Appeals), Raipur-I]

Shri Mahesh Kumar Sharma Appellant

Vs.

C.C.E., Raipur Respondent

Appearance

Mr. Hrishikesh, Advocate - For Appellant

Mr. D. Singh, DR - For Respondent

CORAM: Honble Mr. S.K. Mohanty, Member (Judicial)

Final Order No.54191/2015, dated 28.07.2015

Per Mr. S.K. Mohanty :

The dispute involved in this case relates to non-payment of service tax by the appellant on the taxable service, namely, Rent-A-Cab Scheme Operator Service during the period 2007-08 to 2010-11 (up to February, 2011).

2. Heard both sides and perused the records.

3. In the present case, the service tax Department vide adjudication order dated 09.11.2012 had confirmed the service tax demand of Rs.28,10,840/- along with interest and imposed equal amount of penalty, on the ground that the services provided by the appellant are conforming to the definition of taxable service of Rent-A-Cab Scheme Operator. The service tax demand was confirmed by invoking the proviso to Section 73(1) read with Section 75 of the Finance Act, 1994. In appeal, the Commissioner (Appeals) has reduced the service tax liability to Rs.5,22,616/- and waived the penalty imposed under Sections 76, 77 and 78 ibid.

4. The grievance of the appellant is that the extended period invoked in the Show Cause Notice will have no application for confirmation of demand, since there is no element of fraud, collision, suppression of facts, etc. on the part of the appellant with the intention to defraud the Govt. revenue.

5. I find that the ld. Commissioner (Appeals) vide impugned order has set aside the penalty on the applicant by recording a positive finding that there was no evidence to show the wilful mis-statement or suppression of facts on the part of the appellant for not discharging the service tax liability. The relevant portion of the impugned order is reproduced below:-

17. ..Thus I find in the instant case there is only inadvertent non-payment of service tax and there was nothing on record displaying a wilful default on part of the appellant. No justification for imposition of penalty under Section 76, 77 and 78 has been given in the impugned order. In this regard I find that the Appellant not only shown bonafide belief but also explained the cause which constitute reasonable cause for not discharging service tax.

6. I find that since the ld. Commissioner (Appeals) has dropped the penalty holding that there is no wilful default in non-payment of service tax, it is not proper in upholding the demand on limitation ground in as much as the ingredients such as fraud, wilful mis-statement, suppression of facts, etc. are common in both the statutory provisions, i.e., proviso to Section 73 as also in Section 78 ibid.

7. In view of the above, I am of the considered opinion that the extended period of limitation cannot be invoked for confirmation of service tax liability and the liability should be confined to the period of one year from the date of issue of Show Cause Notice. Therefore, by setting aside the impugned order, the matter is remanded to the original adjudicating authority for ascertaining the normal limitation period and to confirm the service tax liability, if any, within such period of limitation.

8. The appeal is disposed of by way of remand.

[Operative portion pronounced in the open court]

(S.K. Mohanty)

Member (Judicial)

SSK

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