Custom, Excise & Service Tax Tribunal
Dell International Services India Pvt ... vs Commissioner Of Central ... on 7 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/27667/2013-SM [Arising out of Order-in-Appeal No. 124-2013 dated 10/06/2013 passed by Commissioner of Central Excise and Service Tax, LTU BANGALORE ] Dell International Services India Pvt Ltd No.12/1, 12/2a, 13/1a, Divyashree Greens, Koramangla Inner Ring Road, Domlur Post BANGALORE - 560071 KARNATAKA Appellant(s) Versus Commissioner of Central Excise,Customs and Service Tax BANGALORE-LTU NULL 100 FT RING ROAD JSS TOWERS, BANASHANKARI-III STAGE, BANGALORE, - 560085 KARNATAKA Respondent(s)
Appearance:
LAKSHMI KUMARAN & SRIDHARAN WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS NO.26/1, DR. RAJKUMAR ROAD, BANGALORE - 560 055 KARNATAKA For the Appellant Ms. Neethu James, Adv.
For the Appellant Shri Naveen Kushalappa, AR For the Respondent Date of Hearing: 07/11/2017 Date of Decision: 07/11/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22725 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 10.06.2013 passed by the Commissioner (A) whereby the Commissioner (A) has imposed equal penalty under section 78 of Finance Act, 1994.
2. Briefly the facts of the present case are that it was observed by the audit team that the appellants had not made payment of service tax on certain services such as Commercial coaching and training service, Manpower recruitment and supply service, Telecommunication service, Maintenance and repair service, Architect service and Technical testing and Analysis services received from overseas service providers for the years 2006-07 and 2007-08. Thus, it appeared that the appellant was liable to pay service tax along with interest for contravening section 73 of the Finance Act, 1994. On being pointed out, the assesse paid the service tax along with the interest. However, the assesse had not disclosed the receipt of services to the department and did not pay the service tax on these services until pointed out by the audit team. Hence, it appeared that the appellant was liable to pay penalty under section 76 & 78 of the Act.
3. On these allegations, a show cause notice was issued demanding penalty and after following the due process, the original authority confirmed the demand.
4. Aggrieved by the said order, the appellant filed the present appeal before the Commissioner (A) who also confirmed the order-in-original.
5. Heard both the parties and perused the records.
6. Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same is passed contrary to the binding decision passed by the Tribunal. She further submitted that the appellant paid the tax along with interest prior to the issue of show cause notice when the same was pointed out by the department during the course of audit proceedings. She further submitted that the issue involved in the present case is squarely covered under section 73(3) of Finance Act, 1994 which provides that when the service tax along with interest is paid before the issue of show cause notice, then show cause notice should not have been issued. For this submission, she relied upon the following decisions:
* Commissioner of Central Excise Visakhapatnam-II vs. M/s. Tirupathi Fuels Pvt Ltd 2016-TIOL-2311-CESTAT-Hyd; * Veriton Software Solution Pvt Ltd vs. Comissioner of Central Excise, Customs and Service Tax, Mysore 2015-TIOL-533-CESTAT-Bang.
7. She further submitted that there is no suppression on the part of the appellant and the non-payment of service tax on few invoices pertaining to payment in foreign exchange was primarily on account of oversight and clerical error while computing the service tax liability and that there was no willful omission on the part of the appellant to evade payment of tax. She further submitted that though the audit was conducted covering the period from 2005-2010, the non-payment of service tax has been noticed only in respect of 17 transactions during the year 2006-07 and 2007-08. She further submitted that the service tax liability is on reverse charge basis and therefore no malafide can be attributed. For this submission, she relied upon the following decisions.
* Fermenta Biotech Ltd. Vs. CCE, Chandigarh 2016 (45) STR 285 (Tri-Chan) * Gujarat Ambuja Exports Ltd Vs. Commissioner of Central Excise & Service Tax, Ahmedabad 2014 (34) STR 445 (Tri.Ahmd) * Gujarat Borosil Ltd. Vs. Commissioner of Central Excise & ST, Surat 2014 (36) STR 808 (Tri-Ahmd)
8. She further submitted that the penalty is not imposable when the situation is revenue neutral and for this submission, she relied upon the decision in the case of Nirlon Ltd. Vs. Commissioner of Central Excise, Mumbai 2015-TIOL-96-SC-CN.
9. On the other hand, the Learned AR reiterated the findings of the impugned order and submitted that there was suppression on the part of appellant with intent to evade payment and therefore extended period was rightly invoked. After considering the submissions of both the parties and perusal of material on record and the various decisions cited supra, I find that the appellant has paid the service tax liability immediately on pointing out the same by the audit and the appellant has paid the service tax along with interest prior to the issue of show cause notice and therefore as per the decision cited supra, the case of the appellant is covered under section 73(3) of Finance Act, 1994. Further, I find that the revenue has not brought any evidence to show that there was suppression on the part of the appellant. Further, I find that the service tax liability in the present case was on reverse charge basis and the situation is revenue neutral and in view of the above decision, no penalty can be imposed when the situation is revenue neutral. Following the ratios of the decisions cited supra, I set aside the impugned order by allowing the appeal of the appellant.
(Operative portion of the Order was pronounced in Open Court on 07/11/2017) S.S GARG JUDICIAL MEMBER RB 1