Custom, Excise & Service Tax Tribunal
M/S. Akash Ganga Courier Jaipur (P) Ltd vs Cce, Jaipur-Ii on 15 October, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No. 2, R.K. Puram, New Delhi COURT No. II ST/STAY/2329/10-SM IN AND SERVICE TAX APPEAL NO. 1136/10-SM [Arising out of Order-in-Appeal No. 197(DK)ST/JPR-i/2010 dated 29.4.2010 passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur-I, Jaipur] M/s. Akash Ganga Courier Jaipur (P) Ltd., Appellants Versus CCE, Jaipur-II Respondent
Appearance:
Shri Ashok Kumar Jain, C.A. for the appellants;
Shri K.P. Singh, SDR for the Revenue Date of Hearing/decision: 15th October, 2010 Coram: Honble Shri D.N. Panda, Judicial Member;
FINAL ORDER NO. DATED Per D.N. Panda:
Learned authorized representative submits that the appellant was under belief that Maruti Van that was purchased having suffered central excise duty for use in providing courier service entitles the appellant to avail Cenvat Credit of Central Excise duty paid on Maruti Van. With such belief, even if the vehicle was purchased from the dealer, the appellants set off the duty element of Rs. 71,026/- as Cenvat credit against service tax paid by them. But, when the appellants came to understand that the invoice issued by Maruti dealer not exhibiting central excise duty element paid deprives the appellants from set off of Rs. 71,026/- against their service tax liability, the appellants discharged such liability in terms of a challan, copy of which is produced today for perusal of Revenue. Having bona fide belief as stated the Appellant acted accordingly. The appellant also cleaned its hands depositing the interest element of Rs. 42,221/- in terms of challan dated 15.1.10. Further, to buy peace the appellants also deposited Rs. 17,757/- towards penalty by a challan, a copy of which is produced today for perusal of Revenue.
2. In view of aforesaid compliance to the law the appellants submits that there may be total waiver of pre-deposit and penalty imposed under Rule 15(4) of Cenvat Credit Rules, 2004. Having been waived by the learned first appellate authority there should not be further penalty of Rs. 71,026/- under Section 76 of the Finance Act, 1994.
3. Por contra, learned D.R. submits that what was required to be considered has been considered by the learned appellate authority. The appellants do not deserve any further concession in respect of penalty.
4. Heard both sides and perused the record.
5. Having gone to various aspects of the matter as has been highlighted by Appellant as aforesaid, it has become expedient to dispose of the appeal itself at the interim stage in the interest of justice without adding pendency. There appears no dispute about the cooperation of the appellants who came forward after the adjudication order was passed. Adjudication order was passed on 21.12.2009 raising service tax demand of Rs. 71,026/-, interest under section 75 of Finance Act, 1994, and penalty of Rs. 71,026/- under Section 76 of the Finance Act, 1994, as well as penalty of Rs. 71,026/- under Rule 15(4) of Cenvat Credit Rules, 2004. Learned Commissioner (Appeals) waived the penalty under Rule 15(4) of Cenvat Credit Rules, 2004 coming to the conclusion that there was no penal provision under that rule at the material time. It appears that Rule 15(4) of Cenvat Credit Rules, 2004 having made provision for imposition of penalty under Section 78 of Finance Act, 1994. Legislature did not prescribe further penalty under Rule 15(4) of Cenvat Credit Rules, 2004. In the present case no penalty is imposed under Section 78 of the Finance Act, 1994. Therefore, no further exercise is called for in respect of Rule 15(4) of Cenvat Credit Rules, 2004 or Section 78 of Finance Act, 1994.
6. So far as penalty under Section 76 of the Finance Act, 1994 is concerned the liability under that Section arises for failure to pay service tax. Quantum of penalty prescribed is subject to ceiling that the same shall not exceed service tax payable. In the present case, the belief of the appellants that it was entitled to credit of excise duty paid on Maruti van has brought the appellants to the purview of penalty. But cooperative attitude of the appellants comes to record to appreciate bonafide of appellant when the appellant preferred itself to deposit Rs. 71,026/- towards service tax which arose due to disallowance of Cenvat credit, interest of Rs. 42,221/- and penalty of Rs. 17,757/- by three different challans. Of course three challans are subject to verification by Revenue.
7. Section 76 of Finance Act is subjected to provision of Section 80 of the Finance Act, 1994. That is an overriding section to mitigate hardship caused by section 76 and 78 of Finance Act, 1994. For reasonable cause attributable to the failure under law the defaults are not looked in gravious manner. The conduct of the appellant in the present case do not pose any difficulty to understand that the appellants did not prefer litigation. Unfortunately, ignorance of law of the appellant appear to have clouded in the minds of the appellant to commit bonafide mistake. When ignorance of law comes to record, the appellant should not suffer for its mistake.
8. When the aforesaid features persist, it is not desirable to keep this appeal pending merely disposing stay application when sufficient materials came to record. Therefore, dispensing with pre-deposit and also considering that the appellant has already deposited Rs. 17,757/- towards penalty the balance demand of penalty is waived. Consequently, the appellant gets relief partly to the extent of the quantum of penalty of Rs. 53,269/- under Section 76 of the Finance Act, 1994. Such conclusion results in modification of first appellate order. However, this order has been passed subject to verification of challans produced by the appellants before adjudication by that Authority.
9. In the result, stay application is disposed of and appeal is partly allowed.
10. Learned D.Rs apprehension in the course of hearing was that this order may affect Revenues interest because assessees without satisfying the requirement of documentation desired by law may take similar relief in future. It is made clear that learned D.R. should not be apprehensive for the reason that this order has been passed on the governing facts and attendant circumstances of the case as aforesaid and may or may not come to the rescue of any other assessee in future unless that case comes within the four of this order.
(Dictated & pronounced in the Open Court.) (D.N. PANDA) JUDICIAL MEMBER RK 6