Custom, Excise & Service Tax Tribunal
Altech Enterprises vs Commissioner Of Service Tax ... on 1 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/28330/2013-SM [Arising out of Order-in-Original No. 73/2013 dated 02/04/2013 passed by Commissioner of Central Excise and Service Tax, BANGALORE-I (Appeal) ] For approval and signature: HON'BLE SHRI S.S GARG, JUDICIAL MEMBER 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? Yes 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 Altech Enterprises No.86/b, Industrial Suburb, Yeshwanthpur, BANGALORE - 560022 KARNATAKA Appellant(s) Versus Commissioner of Service Tax Bangalore-service Tax 1ST TO 5TH FLOOR, TTMC BUILDING,above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)
Appearance:
Shri R. J. Shenoy, Tax Consultant For the Appellant Shri Pakshi Rajan, AR For the Respondent Date of Hearing: 01/09/2016 Date of Decision: 01/09/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20730 / 2016 Per : S.S GARG The present appeal is arising from the letter dated 7.11.2013 issued by the Commissioner directing the appellant to pay the arrears of Rs.4,40,057/- immediately and produce the copy of the challan as proof within 15 days of the receipt of the letter failing which recovery will be initiated to recover the said arrears in terms of provision of Section 87 of the Finance Act, 1994.
2. Vide letter dated 7.11.2013, the Commissioner has intimated the appellant that the differential service tax for the respective financial years have been averaged month-wise for the purpose of computation of interest as neither the month-wise break-up is available nor the appellant have submitted the same to the Department. Further, the appellant was informed that the appropriate interest has not been paid within 30 days from the date of receipt of the said Order-in-Original, the benefit of reduced penalty of 25% cannot be extended to the appellant. This letter was issued in consequence of the order passed by the Additional Commissioner dated 2.4.2013 vide which the Additional Commissioner passed the following order:
46. In view of the above, I pass the following order.
(i) I hold that the services of powder coating provided by the assessee to M/s. B.L. Kashyap and Co., for the period from 01.04.2007 to 31.03.2011 is classifiable under the category of Business Auxiliary Services as per Section 65(19) of Finance Act, 1994;
(ii) I modify the demand of an amount of Rs.2,33,119/- (Rupees Two lakhs thirty three thousand one hundred and nineteen only) as demanded at Sl. No.1 of the show-cause notice by reducing it to Rs.25,692.00 and I demand a sum of Rs.25,692.00 (Rupees Twenty five thousand six hundred ninety two only) from the assessee;
(iii) I modify the demand of an amount of Rs.2,64,265/- (Rupees Two lakhs sixty four thousand two hundred and sixty five only) as mentioned in the show-cause notice and reduce it to Rs.1,89,600.00 being the differential service tax on the Erection and Commissioning and Installation service for the period from 01.04.2007 to 31.03.2009 as discussed in Para 31 above and I demand Rs.1,89,600.00 only (Rupees One Lakh Eighty nine thousand six hundred only) from the assessee;
(iv) I demand an amount of Rs.1,34,468/- (Rupees One lakh thirty four thousand four hundred and sixty eight only ) being the differential service tax on the Works Contract service for the period from 01.04.2009 to 31.03.2011 as discussed in Para 31 above;
(v) I drop the demand of Rs.4,34,832/- (Rupees Four Lakhs thirty four thousand eight hundred and thirty two only) made in the para 12 of the notice in respect of the services rendered to BIAL;
(vi) I demand interest on the modified demands specified under (ii), (iii) & (iv) above as per the provisions of Section 75 of the Finance, Act, 1994;
(vii) I refrain from imposing penalty under Section 76 of the Finance Act, 1994 since I am imposing penalty under Section 78 of the Act, ibid;
(viii) I impose a penalty of Rs.10,000/- (Rupees Ten thousand only) under the provisions of Section 77 of the Finance Act, 1944 for failure to obtain registration & for failure to file ST3 returns.
(ix) I impose a penalty of Rs.3,49,760/- (Rupees three lakhs forty nine thousand seven hundred sixty only) being the aggregate total of the total service tax due and demanded at Sl Nos.(ii), (iii) and (iv) above under the provisions of Section 78 of the Finance Act for contravention of the provisions with an intent to evade payment of duty with respect to the demands made at Sl. Nos.(ii) (iii) & (iv) above. However, I hereby order reduction of this penalty to 1/4th of the total service tax demanded at (ii), (iii) & (iv) above subject to the condition that the total service tax demanded of Rs.3,49,760/- (Rupees Three lakhs forty nine thousand seven hundred sixty only) is paid along with appropriate interest as demanded at (vi) above and the reduced penalty within 30 (thirty) days of the receipt of this order. 2.1 Aggrieved by the recovery notice, the appellant has filed the present appeal and submitted that Order-in-Original dated 2.4.2013 was received by the appellant on 6.5.2013. As per the order, appellant has paid the service tax together with interest and penalty within 30 days from the date of receipt of the order and the details of the payments are given below:
(a) Service Tax :
Rs.3,49,760.00 vide Challan No.2 dated 8.5.2013 for Rs.3,24,068.00 and Challan No.4 dated 28.5.2013 for Rs.25,692.00
(b) Interest :
Rs.90,878.00 vide Challan No.3 dated 28.5.2013 for Rs.6,620.00 and Challan No.8 dated 29.5.2013 Rs.84,258.00
(c) Penalty :
Res.87,400.00 vide Challan No.1 dated 28.5.2013 for Rs.6,423.00 and Challan No.1 dated 1.6.2013 for Rs.81,017.00
(d) Additional Penalty :
Rs.10,000.00 vide Challan No.2 dated 1.6.2013 2.2 Thereafter, the Deputy Commissioner issued the letter dated 10.7.2013 wherein it is stated that the benefit of reduced penalty of 25% is not available to the appellant for the reason that interest has not been paid and further directed the appellant to pay the balance interest of Rs.1,77,737/- and penalty of Rs.2,62,320/-. The appellant filed reply to the said letter and in the meanwhile one more letter dated 27.8.2013 was issued. Thereafter, appellant represented before the Commissioner seeking his intervention and to grant the benefit of reduced penalty of 25%. The Commissioner vide his letter dated 7.11.2013 did not consider the request of the appellant and directed the appellant to deposit Rs.4,40,057/- immediately. The learned counsel for the appellant submitted that in Para 40 of the Order-in-Original dated 2.4.2013 which has been observed as under:
40. It is seen that the assessee has calculated the amounts along with interest that is payable even though the same may not tally with the calculation made in the notice. Hence the applicability of interst on the demand asper Section 75 of the act is accepted by the assessee and is correct and does not need a relook. Further, in the case of CCE, Calicut vs. GM Telecom, BSNL {2009 (14) STR 450 (Ker.)}, Honble High Court of Kerala at Ernakulam it was held that and observed as under:
Whatever be the reason for the belated payment, we find that the provision of interest contained in Section 75 is mandatory. He further submitted that appellant has recalculated the interest of Rs.3,49,760/- for a further period of 10 months i.e., from 1.4.2011 to 31.3.2013. The revised interest from 1.4.2011 to 31.3.2013 on Rs.3,49,760/- was arrived at Rs.90,878/-. Appellant has also paid additional interest of Rs.37,814/-. The respondent has calculated the interest on the average month-wise amount which is bad in law.
3. On consideration of the submissions of both the parties, I am of the view that this case needs to be remanded and I accordingly remand the case to the Additional Commissioner with a direction to redo the calculation of interest on the actual amount due month-wise instead of averaged amount. It is directed that the learned Additional Commissioner before redoing the calculation will give an opportunity to the appellants to produce all the documentary evidence in support of their case as to when they received the Order-in-Original; when they paid the duty, interest and penalty; and further whether appellant is entitled to the benefit of reduced penalty and thereafter decide the case in accordance with law by passing a reasoned order. Appeal is allowed by way of remand.
(Operative portion of the order was pronounced in open court on 01.09.2016.) S.S GARG JUDICIAL MEMBER rv 6 1