Sumit S.Kadri vs Commissioner Of Central Excise And ...

[Arising out of Order-In-Appeal No 156/2009 dated 21/04/2009 passed by the Commissioner of Central Excise (Appeals), Mangalore.]

For approval and signature:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

SUMIT S.KADRI D.NO.15-3-120/6, VIOLET COMPLEX, UPPER BENDORE, MANGALORE Appellant(s)

Versus

Commissioner of Central Excise and Service Tax MANGALORE 7TH FLOOR, TRADE CENTRE, BUNTS HOSTEL RD., MANGALORE  575 003. KARNATAKA Respondent(s)

Appearance:

Mr. K.S. RAVI SHANKAR & Mr. N. Anand, Advocates # 152, RACE COURSE ROAD,BANGALORE BANGALORE - 560001 KARNATAKA For the Appellant

Mr. R. Gurunathan, AC (AR) For the Respondent

Date of Hearing: 20/01/2015

Date of Decision: 20/01/2015

CORAM:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20104 / 2015 Per : B.S.V.MURTHY

The appellant acted as a subcontractor to the main contractor. On the ground that appellant should have paid service tax on the construction of residential complex services for the services rendered by him, proceedings were initiated which has culminated in confirmation of demand for service tax of about Rs.2.2 lakhs and penalties under various Sections of Finance Act, 1994. Even though the period involved here is prior to 2007 and the appellant could have claimed relief under Boards Circular which was in existence for earlier period taking a view that if the contractor has paid the tax and the subcontractor need not pay, the appellant in this case who is an individual did not contest the issue but paid the tax and the interest. However, proceedings were initiated, which resulted in imposition of mandatory penalty.

2. Learned counsel submits that appellant is a small time contractor and he has already paid the interest and service tax entirely and the only request is to waive the penalty by invoking the provisions of Section 80 of Finance Act, 1994. He also submits that Commissioner (A) also had given the relief for penalty under Section 76 by invoking the provisions of Section 80. He submits that once provisions of Section 80 are invoked in respect of penalty under one section, penalties under other sections also have to be waived. He relies upon the decision in the case of Anil Kumar Yadav: 2011 (22) S.T.R. 20 (Tri-.Chennai) and Garodia Special Steels Ltd.: 2014-TIOL-2638-CESTAT-MUM, in support of his submissions.

3. Learned AR on the other hand would support the impugned orders and reiterates the submissions. He submits that while reasonable cause could be there for waiver of penalty under Section 78, there cannot be such reason for penalty under Section 70 read with Rule 7C since this is the show-cause notice issued for the subsequent period by which time the appellants were aware of the law and should have followed the provisions. In my opinion, penalty under Section 78 cannot be sustained especially in view of the fact that provisions of Section 80 have already been invoked by Commissioner (A). However, since the learned AR pressed the issue, the learned counsel agreed to discharge the liability for penalty under Section 70 read with Rule 7C of Central Excise Rules, 1994.

4. In view of the above discussions, while the penalty of Rs.2,000/- imposed under Section 70 read with Rule 7C as indicated in the appeal memorandum is confirmed, as not contested, penalties under Section 77 and 78 are set aside by invoking the provisions of Section 80 of Finance Act, 1994, having regard to the facts and circumstances discussed above.

(Operative portion of the Order was pronounced in open court)

B.S.V.MURTHY TECHNICAL MEMBER rv 3