Karnataka High Court
M/S K Madhav Kamath Brother And Co. vs The Asst.Commissioner Of Central ... on 17 December, 2014
Bench: Mohan M Shantanagoudar, K.N.Phaneendra
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 17 t h DAY OF DECEMBER 2014
PRESENT
THE HON'BLE MR. JUSTICE MOHAN .M.SHANTANAGOUDAR
AND
THE HON'BLE MR. JUSTICE K.N.PHANEENDRA
C.E.A. No.201 OF 2013
BETWEEN:
M/s. K MADHAV KAMATH BROTHER & CO.
NEAR AKSHAY PARK, 3RD CROSS,
RAVINAGAR ROAD, HUBLI-580024,
R/BY ITS ..................S/o.Sri..............
AGED ABOUT ...........YEARS. (sic.)
... APPELLANT
(By Sri. GANGADHAR J M ADV.)
AND:
THE ASST.COMMISSIONER OF CENTRAL EXCISE
HUBLI DIVISION, I FLOOR,
C.R. BUILDING, NAVANAGAR,
HUBLI
... RESPONDENT
(By Sri S C BHEEMARADDI ADV.)
THIS CEA IS FILED U/SEC.35G OF THE CENTRAL
EXCISE ACT, 1944, PRAYING TO:
1. FORMULATE THE SUBSTANTIAL
QUESTION OF LAW STATED IN THE
APPEAL MEMO;
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2. ALLOW THE APPEAL AND SET ASIDE THE
IMPUGNED FINAL ORDER No.25003 of
2013 DATED: 15.01.2013 (ANNEXURE-
A) OF THE APPELLATE TRIBUNAL IN
APPEAL No.ST/1012/2009.
3. PASS SUCH OTHER SUITABLE ORDERS
AS THIS HON'BLE COURT DEEMS FIT TO
GRANT IN THE FACTS AND
CIRCUMSTANCES OF THE CASE IN THE
INTEREST OF JUSTICE AND EQUITY.
This appeal coming on for Admission this day,
Mohan .M.Shantanagoudar, J. delivered the
following:
J U D G M E N T
A demand of `1,11,809/- was made by the Department by issuing a show-cause notice dated 14.03.2008 to the assessee towards the service tax and education cess for the period from January-2006 to October-2006, under Section 73 of the Central Excise Act, 1944 (for short 'the Act').
2. Under the show-cause notice itself, the penalty was proposed to be levied. The assessee contested the penal proposals mainly on the ground that he did not have any intention to evade :3: the payment of service tax and that the non-filing of returns and non-payment of service tax were merely on account of bona fide mistake. It is also the case of the appellant/assessee that the entire amount of service tax has been paid prior to issuance of show-cause notice and therefore, no penalty was imposeable on the assessee.
3. The contention of the assessee is turned down by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Branch, Bangalore, (for short 'CESTAT') by the order dated 17.01.2013, which is impugned in this appeal.
4. The very grounds as urged before the Tribunal are urged by the assessee's counsel / appellant's counsel before this Court.
5. Undoubtedly, the appellant has paid the taxes belatedly. However, the grievance of the appellant is entirely against the penalties imposed under Sections 76, 77 & 78 of the Act. Before the Tribunal, though the question of limitation was :4: raised, no serious challenge against the payment of service tax is forthcoming. On facts, the Tribunal has concluded that there is no explanation as to the so called bona fide mistake. The Tribunal on facts has also concluded that it is not a case of bona fide mistake and has upheld the case of the Department.
6. Merely because the service tax in question is paid prior to the issuance of show cause notice, the assessee cannot be exonerated from payment of penalty. As has been held by the Apex Court in the case of UNION OF INDIA vs. RAJASTHAN SPINNING AND WEAVING MILLS reported in (2009) 13 Supreme Court Cases 448, any payment of the duty amount in question, whether before or after the show-cause notice has been issued, could not alter the penal liability under Section 11-AC of the Act. Section 11-AC of the Act appears to be pari materia with Section 78 of the Finance Act, 1994.
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In view of the same, no interference is called for. The appeal fails and the same stands dismissed.
SD/-
JUDGE SD/-
JUDGE RK* Ct:Byg/-