Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Sarda Energy & Minerals Ltd on 31 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. 779 of 2009- Cus
[Arising out of Order-In-Appeal No. Commissioner/RPR/42/2009 dated 29.06.2009 passed by Commissioner, Customs & Central Excise, Raipur ]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. B Ravichandran, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
Commissioner of Central Excise Appellants
Raipur
Vs.
M/s. Sarda Energy & Minerals Ltd. Respondent
Appearance:
Smt. Suchitra Sharma, AR for the Appellants Shri J M Shrma, Consultant for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. B Ravichandran, Member (Technical) Date of Hearing/ Decision: 31.03.2016 ORDER NO . FO/ 51191 /2016 Per Archana Wadhwa:
Being aggrieved with that part of the impugned order of Commissioner vide which he has not imposed any penalty on the respondent by invoking the provisions of section 80 of the Finance Act, 1994, the Revenue has preferred the appeal.
2. After hearing both the sides, duly represented by Ms. Suchitra Sharma, learned Commissioner, AR as also Shri J M Sharma, Consultant for the respondent, we note that the respondent were receiving certain banking and financial services by way of external commercial borrowings from foreign financers. As per the law, they were required to discharge their service tax liability in respect of the same, on reverse charge basis. However, it is seen that in the year 2007-08, they did not discharge such service tax liability to the extent of around 50.62 lakhs. On being pointed out by the Revenue, they immediately deposited the same on three different dates i.e. 12.4.08, 30.4.08 and 31.5.08. These deposits were made along with interests.
3. In the above backgrounds, proceedings were initiated against them by way of show cause notice issued on 24.12.2008 proposing confirmation of demands and as also for imposition of penalty. During adjudication, the Commissioner took note of the fact that the said deposits already stand made by the assessee, in which case there is no case for issue of show cause notice also. Accordingly, he dropped the penal proceedings invoked in terms of section 76, 77 and 78 of the Act.
4. Revenues contention is that respondent should have been penalized inasmuch as they did not pay the service tax on their own.
5. At this stage, we find that during the relevant period i.e. 2007-2008, there was confusion prevalent in the field as regards the assessees liability to pay service tax on reverse charge basis. Such confusion was settled by the decision of Honble Bombay High Court in the case of Indian National Ship Owners Association vs. Union of India [ 2008-TIOL-633-HC-MUM-ST]. laying down that liability to pay service tax on reverse charge basis would arise only after 18.4.06. The said decision was rendered in the year 2009. In such a scenario, we agree with the respondent that provisions of section 80 would get invoked. Thus, we find no infirmity in the order of Commissioner for any proposal of penalty on the respondent.
6. Revenues appeal is accordingly rejected.
(dictated and pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( B Ravichandran )
Member(Technical)
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