Custom, Excise & Service Tax Tribunal
M/S. Fountain Head Architect Pvt. Ltd vs Cce, Hyderabad Ii on 4 November, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench SMB
Court I
Appeal No. ST/27122/2013
(Arising out of Order-in-Appeal No. 51/2013 (H-II) S.T dt. 18.03.2013 passed by CC, CE & ST (Appeals-II), Hyderabad)
For approval and signature:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial)
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 Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Fountain Head Architect Pvt. Ltd.,
..Appellant(s)
Vs.
CCE, Hyderabad II
..Respondent(s)
Appearance Shri. Ch. Nageswara Rao, Consultant for the Appellant.
Shri. Nagraj Naik, Deputy Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of hearing: 04/11/2016 Date of decision: 04/11/2016 FINAL ORDER No.______________________ [Order per: Sulekha Beevi, C.S.] The appellants are rendering the services under the category of Architect Services and registered with the service tax department. During the period 2007- 2008 and 2008-2009 the appellant availed input services namely Landscape Consultancy Services from outside India from M/s. Bell Collins and International (HK) Ltd., The appellant failed to pay service tax under reverse charge mechanism which had come into with effect from 2006 onwards. The appellant paid the service tax along with interest in 2009 itself. The failure to pay service tax was brought to notice of the appellant in audit objection which was conducted in 2009. A show cause notice was issued alleging non- payment of service tax on the amount received from the foreign company and also alleging irregular availment of credit for the reason that the invoices on which credit was availed did not contain necessary details. After adjudication, the demand along with interest was confirmed and ordered appropriation of the amount paid by the appellants besides imposing penalty. The appellant filed an appeal before the Commissioner (Appeals), who vide the order impugned herein upheld the demand, interest and penalties. Hence this appeal.
2. On behalf of the appellant the Ld. Consultant Shri. Nageswara Rao submitted that the appellant had paid the service tax along with interest in 2009 itself. So also the demand raised in respect of the irregularly availed credit was also discharged by appellant immediately on pointing out by the audit party. He contended that as per Section 73(3), no show cause notice ought to have been issued against the appellant when the appellant had paid the amount immediately on pointing out the short payment of service tax as well as the irregularly availed credit.
3. The Ld. AR Shri. Nagraj Naik reiterated the findings in the impugned order. He submitted that the appellants had taken registration for payment of service tax but had not reflected the amount paid to the foreign company in their service tax returns and failed to pay service tax under the reverse charge mechanism. That therefore, the show cause notice issued is legal and proper and that appellant is liable to pay the penalty.
4. I have heard both sides. It is not disputed that the appellant paid the alleged short paid service tax along with interest and also reversed the irregularly availed credit immediately on pointing out by the audit party. Thus the outstanding liabilities were discharged by the appellant in 2009 itself, much prior to the issuance of Show Cause Notice. The Show Cause Notice is seen issued on 09.02.2011 only. In the case of Adecco Flexione Workforce Solutions Ltd., 2012 (26) S.T.R. 3 (Kar.) the Honorable Karnataka High Court had occasion to consider similar issue where service tax was paid before issuance of Show Cause Notice. The Honorable Court held that when the assessee paid the service tax along with interest prior to the issuance of Show Cause Notice, no penalty can be imposed. Following the same I hold that the penalties imposed are unwarranted. The impugned order to the extent of imposing penalties is set aside. The appeal is allowed with consequential reliefs, if any.
(Pronounced and dictated in open court) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Lakshmi.
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