Custom, Excise & Service Tax Tribunal
M/S. Gangamai Industries & ... vs Commissioner Of Central Excise, ... on 5 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. ST/89971/14 [Arising out of Order-in- Appeal No. AV(188) 206/2014 dated 1-9-2014 passed by the Commissioner (Appeals), of Central Excise & Customs, Aurangabad] 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?
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M/s. Gangamai Industries & Constructions Ltd
:
Appellant
VS
Commissioner of Central Excise, Customs & ST, Aurangabad
:
Respondent
Appearance
None for the Appellants
Shri. S.R. Nair, Examiner (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 5/8/2016
Date of decision: 5/12/2016
ORDER NO.
The fact of the case is that the appellant have paid service tax, interest and penalty in terms of Section 73(3) of the Finance Act, 1994. Subsequently they realiazed that service tax on GTA service is not payable because GTA service was used for transportation of the agriculture produce therefore they filed refund claim only in respect of interest and penalty paid alongwith service tax, since in respect of service tax paid on GTA service, they availed Cenvat credit, they have not claimed refund. The said refund was rejected on the ground that once the appellant have admittedly paid service tax, interest and penalty, they have accepted the liability on their own. Therefore, whether Service tax on the said service was payable or not, amount paid voluntarily cannot be refunded. Aggrieved by the Order-in-Original, appellant filed appeal before the Commissioner(Appeals), which came to be rejected, therefore the appellant is before us.
2. Shri. S.M. Sayyad Ld. Counsel on behalf of the appellant appeared on 29-7-2016 and submits that there is no dispute that service tax was not payable on the GTA service used for transportation of agriculture produce, therefore whatever service tax, interest and penalty paid is refundable. The appellant claimed refund only in respect of interest and penalty as they have availed Cenvat Credit in respect of service tax paid on the GTA service. He submits that once the service tax is not payable there cannot be liability of interest and penalty. Therefore the amount paid by the appellant on account of penalty and interest should be refundable.
3. On the other hand, Shri. S.R. Nair, Ld. Examiner(A.R.) appearing on behalf of the revenue reiterates the findings of the impugned order. He submits that appellant have discharged the service tax alongwith interest and penalty in accordance with 73(4A). This provision is for voluntary payment by the assessee, once this option is availed then departments hands are tight and no show cause notice can be issued, in other word, by availing option of Section 73(4A) the appellant have admitted the liablilty therefore whether legally tax payable or not that does not make any difference. He further submits that the appellant is not disputed service tax payment and appellant also not claiming refund therefore interest and penalty provided under Section 73(4A) is piggy back which unavoidably is payable by the assessee. For this reason also refund of interest and penalty paid by the appellant cannot be refunded. He relied upon judgment in case of Nukey Nufit Nakshtra Vs. Commissioner of Central Excise, Pune-II[2015-TIOL-607-CESTAT-MUM].
4. I have carefully considered the submissions made by both sides and perused the record.
5. I find that appellant have consciously availed the option of Section 73(4A) which reproduced below:
(4A) Notwithstanding anything contained in [sub-section (4)], where during the course of any audit, investigation or verification, it is found that any service tax has not been levied or paid or has been short_ levied or short-paid or erroneously refunded, but the true and complete details of transactions are available in the specified records, the person chargeable to service tax or to whom erroneous refund has been made, may pay the service tax in full or in part, as he may accept to be the amount of tax chargeable or erroneously refunded along with interest payable thereon under section 75 and penalty equal to one per cent. of such tax, for each month, for the period during which the default continues, up to a maximum of twenty- five per cent. of the tax amount, before service of notice on him and inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under sub-section (1) in respect of the amount so paid and proceedings in respect of the said amount of service tax shall be deemed to have been concluded:
Provided that the Central Excise Officer may determine the amount of service tax, if any, due from such person, which in his opinion remains to be paid by such person and shall proceed to recover such amount in the manner specified in sub-section (1).
Explanation. For the purposes of this sub-section and section 78, "specified records" means records including computerized data as are required to be maintained by an assessee in accordance co or e invoices the time being in force or where there is no such requirement, the invoices recorded by the assessee in the books of account shall be considered as the specified records.] From the above provisions, it can be seen that appellant has option that if any amount of service tax was not paid or short paid, same can be paid suo moto alongwith interest and penalty equal to one per cent. In the same provision, it was provided once the payment is made the case shall stand closed thereafter it is not open to challenge either for the assessee or for the department and department cannot issue show cause notice. In such provision, after availing the option of the volunteer payment of service tax, interest and penalty appellant cannot claim that the payment was wrongly made consequently cannot claimed the refund. On going through the judgment of Nukey Nufit Nakshtra(supra). I find that the identical issue has been settled that once the amount of tax paid under Section 73(3) of Finance Act, 1994 and no show cause notice is issued under Section 73(1) of the Finance Act, 1994 the issue is considered as closed and no refund arises. The ratio of the judgment is directly applicable in the fact of the present case. I therefore upheld the impugned order and dismiss the appeal of the appellant.
(Order pronounced in Court on _________________) Ramesh Nair Member (Judicial) sk 2 ST/89971/14