Custom, Excise & Service Tax Tribunal
Vodafone Mobile Services Limited ... vs Commissioner, Service Tax ... on 22 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. ST/85934/16 [Arising out of Order-in- Appeal No. PUN-SVTAX-000-APP-224-15-16 dated 15-1-2016 passed by the Commissioner of Service Tax (Appeals), Pune] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
Vodafone Mobile Services Limited (formerly known as Vodafone Cellular Limited) :
Appellant VS Commissioner, Service Tax Commissioerate, Pune :
Respondent Appearance Shri. Prasad Paranjape, Advocate for the Appellants Shri. A.B. Kulgod, Asstt. Commissioner(A.R.) for the Respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 22/9/2016
Date of decision: 22/9/2016
ORDER NO.
The issue involved in the present case is that the appellant have availed Cenvat credit in respect of 5 invoices twice for the period June 2009, September 2010 and December, 2010. During the audit in the month of December, 2011, it was pointed out that the appellant have availed double credit in respect of some invoices and simultaneously they have paid entire amount alongiwth interest on 10-1-2012. Subsequently a show cause notice dated 13-10-2014 was issued proposing demand of service tax and appropriation of the amount already paid by the appellant. In the adjudication order demand was confirmed and amount paid by the appellant was appropriated and penalty under Section 78 was imposed which is equal to the Cenvat credit of Rs. 7,09,020/. In the appeal by the appellant before the Commissioner(Appeals), he upheld the Order dated 29-7-2015 of the Original adjudicating authority and rejected the appeal filed by the appellant therefore the appellant is before me only for waiver of penalty imposed under Section 78.
2. Shri. Prasad Paranjape, Ld. Counsel for the appellant submits that appellant has a large organization having voluminous transaction. The total credit availed by them during the 2009-10 is approximately 138 crores against numerous service invoices. These 5 invoices were entered into Cenvat credit account twice due to inadvertent and clerical error. He submits that when the mistake was pointed out during the audit conducted by the service tax department, appellant without raising any question on the issue admittedly paid the wrongly availed Cenvat credit of Rs. 7,09,020/- alongwith interest on 10-1-2012. Thereafter the show cause notice was issued after almost one year ten months proposing demand of service tax. He submits that there was no malafide intention in availing Cenvat credit of Rs. 7.09.020/- as against total credit. This meager amount which was inadvertently entered in the system and the appellant has paid the same alongwith interest voluntarily on pointed out by the audit party, therefore penalty under Section 78 should not have been imposed for the reason appellants case is covered by provisions of Section 73(3) of the Finance Act, 1994. In support of his submissions he placed reliance on following judgments:
(a) C.C.E. & S.T. LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd[2012(26) S.T.R. 3(Kar.).
(b) S.K. Electron Engineers Vs. Commissioner of Central Exicse, Nagpur[2015(39) S.T.R. 686 (Tri. Mum)]
3. On the other hand, Shri. A.B. Kulgod, Ld. Asstt. Commissioner(A.R.) appearing on behalf of Revenue reiterates the findings of the impugned order. He submits that wrong credit was availed in the month of Jun 2009, Sep 2010 and Dec 2010, audit was conducted in Dec, 2011 by the time balance sheet for the period involved has been finalized therefore even after there is inadvertent mistake, it should have been corrected by the appellant while finalizing the balance sheet. Therefore this shows that there is malafide intention on the part of the appellant, hence penalty imposed under Section 78 is correct and legal which should not be interfered with.
4. I have carefully considered the submissions made by both sides.
5. I find that wrong availment of credit of 5 invoices are due to reason that some invoices were entered twice in the Cenvat account maintained on computer system. I find the force in the argument of Ld. Counsel that as against total availment of credit amount to Rs. 138 crores, there cannot be malafide intention of taking double credit of Rs. 7,09,020/-. Moreover when the mistake was pointed out by the audit party, appellant have promptly paid the entire service tax with interest. In a case where service tax alongwith interest is paid voluntarily without any contest, immunity is available under Section 73(3). As per this Section, on the ascertainment of the assessee or by the department if the service tax alongwith interest is admittedly paid by the assessee no show cause notice should be issued, accordingly no adjudication process is required and the case stands settled immediately after payment of service tax alongwith interest. I find that case of the appellant is squarely covered under Section 73(3). In the order of the lower authorities it is not disputed that the double entry was made inadvertently. As per above discussion, I am of the view that the appellant has made out fit case for waiver of penalty under Section 73(3) of Finance Act, 1994. The impugned order is set aside and appeal is allowed.
(Dictated in Court ) Ramesh Nair Member (Judicial) sk 5 ST/85934/16