Customs, Excise and Gold Tribunal - Delhi
Pankaj Oil Trading Corporation vs Cce on 20 November, 2006
Equivalent citations: 2007(115)ECC286, 2007ECR286(TRI.-DELHI), 2007[6]S.T.R.44, [2007]9STT211
ORDER
R.K. Abichandani, J. (President)
1. The appellant challenges the order of the Commissioner (Appeals) to the extent that it imposes reduced penalties under Sections 76 and 77 from Rs. 1,59,258/- to Rs. 25,000/- and Rs. 15.100/- to Rs. 4,000/- and confirms the penalty of Rs. 1,59,258/- imposed by the adjudicating authority under Section 78 of chapter V of the Finance Act, 1994. The appellant was a service tax provider in the category of 'Clearing and Forwarding Agent' registered under Section 69 of the said Act having registration number CFA/AHD-I/131 dated 18.2.2002.
2. A show cause notice was issued to the appellant on 7.11.2002 alleging that the noticee was receiving the goods (lubricants) from the premises of their principal IOC Limited, Mumbai, warehousing these goods, providing security for them and maintaining the account for the receipt and dispatch of the same. It was also alleged that the appellant was providing these services both as Dealer Operated Lube Godown (DOLG) and thereafter as an ad hoc CFA (clearing and forwarding agent). The appellant had received Rs. 31,85,157/- as commission for the period from 01.09.1000 to 31.06.2001 as DOLG and was liable to pay service tax of Rs. 1,59,258/- at 5%. It was also alleged that he had received commission of Rs. 24,93,148/- for service rendered as ad hoc CFA during the period from 1.07.2001 to 31.12.2001 and was liable to pay service-tax of Rs. 1,24,657/- at 5%, totaling Rs. 2,83,915/-. It was further alleged that even after obtaining registration, the appellant has not paid service tax due on the amount of services rendered by the firm as DOLG operator for the period from 01.07.1999 to 30.06.2001, although it paid tax of Rs. 1,24,657/- on the taxable amount received as an ad hoc CFA for the period from 01.07.2001 to 31.12.2001. It was alleged that the appellant did not file any service tax returns in the form ST-3 returns for the period from 01.09.2001 to 31.12.2001 and they were filed much later.
3. The Assistant Commissioner, on the basis of the material on record and considering the stand taken by the appellant, found that the appellant was providing taxable services of a clearing and forwarding agent and though it had paid service tax and interest due thereon on the amount of commission received as an adhoc CFA, it had not paid the service tax of Rs. 1,59,258/- on the taxable value of Rs. 31,85,157/- received as DOLG commission for the earlier period from 01.09.99 to 30.06.2001. It was found that the appellant had failed to file correct prescribed half yearly ST-3 returns for the period 01.09.1999 to 31.03.2002. It was held that since there was failure/omission on the part of the appellant justifying invocation of the extended period of limitation of five years for assessment under Section 73(a) of the said Act. The Assistant Commissioner found that the appellant had failed to disclose the value of taxable service and suppressed it and thereby evaded the service tax by not filing the returns under Section 70 of the Act and the Rules framed thereunder for the said period and therefore was liable to be penalty under Section 78 of the Act. The adjudicating authority confirmed the demand of Rs. 2,83,950/- of service tax under Section 68 and adjusted the amount of Rs. 1,24,659/- already paid on 25.02.2002 and imposed penalties of Rs. 15,100/- under Section 76, Rs. 1000/- per return (total Rs. 2000/- under Section 77, for failure to file prescribed service tax returns on two occasions namely, September 2001 and March 2002), imposed penalty of equal amount of Rs. 1.59.258/- for suppressing or concealing the value of taxable services under Section 78 of the Act, imposed penalty of Rs. 500/- under Section 75A of the Act and ordered payment of interest.
4. The appellate Commissioner entertaining the appeal which was filed only against penalties imposed under Section 76, 77 & 78 of the Act found that as per the circular of the Central Board of Excise & Customs dated 23.8.99, the clearing and forwarding agents were required to pay service tax w.e.f. 1.9.1999. The plea of the appellant that there was confusion as to whether the service tax was payable by their principal IOC Limited or by themselves was rejected. It was noted that the matter was clarified as early as on 23.8.99 and despite that, the appellant had not fulfilled its statutory obligation. It was also noted that though the appellant had taken registration on 18.2.2002 and paid the service tax of Rs. 1,24,659/- for the period from July 2001 to December 2001, it did not pay service tax of Rs. 1,59,258/- for the earlier period from 1.9.99 to 30.6.2001. The said amount of Rs. 1,59,258/- was paid only on 10.11.2003 after the adjudicating order was made and the appeal was filed before the Commissioner. The Commissioner reduced the penalties of Rs. 15,100/- to Rs. 4,000/- under Section 76 and Rs. 1,59,258/- to Rs. 25,000/- while confirming the penalty of Rs. 1,59,258/- under Section 78.
5. The learned Counsel appearing for the appellant contended that the appellant was entitled to the benefit of the amnesty scheme, which was declared as per the CBEC circular dated 20.9.2004. He relied upon the decision of the Single Member Bench in CCE, Bhopal v. Industrial Army reported in 2006 (3) STR 526 (Tri. Del), in which the appeal filed against the order of the Commissioner (Appeals) set aside the penalties on the ground that, ''there was no tangible and logical reason as to why the law abiding assessee who had got himself registered more or less in time and had also started paying the service tax along with interest, much before the new scheme became operational, should be denied the benefit of waiver of the penal provisions referred to above for late registration..."was dismissed. In that case the Court found that the appellants were not registered for the period of service provided from 16.10.98 to 31.10.2001 and had also not filed service tax returns.
5.1 The learned Counsel also relied upon the decision of the learned Single Member Bench in Amit Kumar Maheshwari v. Commissioner of Central Excise, Jaipur-II reported in 2006 (2) STR 506 (Tri.-Del), in which while considering the contention that under the amnesty scheme whoever deposited the amount by 30th April, 2004 was exempted from the payment of penalty followed the order of the Tribunal in CCE, Bhopal v. Bharat Security Services & Worker's Contractor's case in which it was found that the service provider who registered and paid service tax during Extra Ordinary Tax Payer Friendly Scheme upto 30.10,2004, was not liable to pay any penalty. The learned Counsel also argued even if amnesty scheme was not available, the appellant not having suppressed the facts and having co-operated with the department ought not to have been imposed penally under Section 78 of the said Act.
6. The learned authorized representative for the department, on the other hand, argued that the amnesty scheme was not applicable to appellant since the appellant was already registered much prior to the scheme. Reliance was placed on the decision of the Single Member Bench in CCE, Bhopal v. Mankodi Enterprises reported in 2006 (73) RLT 21 (CESTAT-Del.), in support of this submission. It was also submitted that appellant had suppressed its liability to pay service tax for the earlier period even though the returns were filed for the subsequent period.
7. As noted above, the appellant was registered as a service tax provider in the category of clearing and forwarding agent under Section 69 of the Act and was allotted registration number on 18.2.2002. The contention that the appellant was entitled to the benefit of the amnesty scheme which was brought into force under the circular of the CBEC dated 20.9.2004 is ex-facie wrong and unwarranted. A bare look at the said circular would show that it was a scheme intended for "instant registration of service providers". It was categorically stated that this scheme, "aims to register all service providers on the basis of their declaration and who had earlier failed to register themselves with the department due to ignorance or any other reason with full waiver of penalty". It is thus clear that the scheme was not applicable to those who had earlier got themselves registered. This aspect has been appropriately noticed by the Hon'ble Single Member Bench deciding CCE, Bhopal v. Mankodi Enterprises reported in 2006 (73) RLT 21 (CESTAT-Del.) when he observed in paragraph 5 of the judgement as under:
I find that the Commissioner (Appeals) in the impugned order from imposition of penalty under Circular dated 20.9.04 was only in respect of those service providers who had earlier failed to register themselves due to ignorance or for any other reason and who came forward and paid the past liability within the period prescribed under the circular. Therefore, this circular was not applicable for those persons who had already taken registration or were paying service tax. Therefore, waiving penalty on the basis of this circular was not correct on the part of the Commissioner (Appeals)". The learned Member set aside the order of the Commissioner (Appeals) in which it was held that "...there was no tangible and logical reason as to why the law abiding assessee who had got himself registered more or less in time and had also started paying the service tax along with interest, much before the new scheme became operational, should be denied the benefit of waiver of the penalty.
8. It is evident from the wordings of the scheme as announced under the circular dated 20.9.2004, that it was intended only for instant registration of service providers, who could make declaration to the department with regard to past liabilities towards the service tax and interest payable.
9. Furthermore, it transpires from the material on record that the appellant had withheld the information by not filing the returns in respect of the period from 1.9.1999 upto 31.06.2001. It has been found by the authorities below that during the said period, the appellant had rendered services of taxable value of Rs. 31,85,157/- on which service tax of Rs. 1,59,258/- was admittedly payable which liability has not been challenged even before the Commissioner (Appeals). Therefore, though the appellant had filed returns on 7.5.2002 in respect of the subsequent period from July 2001 to September 2001 and October 2001 to December 2001, he did not file the returns for the earlier period from 1.9.99 to 30.6.2001. It has been established that the appellant had rendered the service of the DOLG during the said period. Therefore, no declaration in respect of the past liability towards the service tax was made by the appellant and even on that count he was not entitled to get the benefit of the amnesty scheme. Furthermore, not filing of the returns for the earlier period while filing returns for the subsequent period on the face of it leads to an inference of suppressing/ concealing the value of taxable services rendered by the appellant during the earlier period from 1.9.99 to 31.3.2002. Therefore, even apart from non-applicability of the amnesty, the appellant was liable to penalty under Section 78 on the ground of suppressing the disclosure of its liability for the said period. There is, therefore, absolutely no warrant for interfering with the impugned order which has been validly made for cogent reasons. The appeal is, therefore, dismissed.
(Dictated and pronounced in the open Court on 20.11.2006)