Custom, Excise & Service Tax Tribunal
M/S. Kouni Travels Pvt Ltd vs Commissioner Of Service Tax - ... on 19 November, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 26960 / 2013 Appeal(s) Involved: ST/13/2009-SM [Arising out of Order in Appeal 240/2008-ST dt. 08/09/2008 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.] M/s. KOUNI TRAVELS PVT LTD PLOT NO.9 & 10, QUEENS ROAD, BANGALOE Appellant(s) Versus Commissioner of Service Tax - BANGALORE-SERVICE TAX 16/1 S.P.COMPLEX, LALBAGH ROAD, WILSON GARDEN, BANGALORE, KARNATAKA 560027 Respondent(s) Appearance: MR. B.G.CHIDANANDA URS, ADVOCATE #520, AMRUTH NIVAS, 7TH MAIN, 13TH CROSS, RMV 11 STAGE, DOLLARS COLONY, BANGALORE KARNATAKA 560094 For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent CORAM: SHRI B.S.V. MURTHY, HONBLE MEMBER TECHNICAL Date of Hearing: 19/11/2013 Date of Decision: 19/11/2013 Order Per : B.S.V. Murthy, Appellant is engaged in providing rent-a-cab service. During the period from October 2004 to March 2005, in the ST-3 returns filed by the appellants, the appellants showed the total amount received for rendering the service as Rs.25,75,771/- and shown the service tax payable as Rs.26,645/- and paid the same. During the course of audit, it was found that appellants had wrongly calculated the amount of tax payable and there was a short-payment of Rs.78,446/-. A show-cause notice was issued on 17.8.2007 requiring the appellants to make good the short-payment. However, the appellants paid the entire amount of service tax and interest on 19.10.2007 immediately after the issuance of show-cause notice. The original adjudicating authority confirmed the demand of service tax with interest and also imposed penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant filed an appeal before the Commissioner (A), who remanded the matter to the original adjudicating authority with a direction to pass a speaking order. 2. Heard both the sides. The relevant portion of the finding which has led to the appeal is reproduced below: It is also not clear as to why the benefit of abatement as provided under notification No.9/2004 dated 9.7.2004, as amended, is not available to the appellant. Moreover, there was no corroboration established either in the show cause notice or in the order-in-original with regard to suppression with intent to evade payment of service tax by the appellant. It is also a fact that the demand is based only on the details furnished in the ST-3 returns scrutinized by the AGs audit party which they have submitted to the department as per rules and it appears that no suppression could be alleged warranting imposition of equivalent penalty for the case made from the details in returns duly submitted to the department. In these circumstances the impugned order is not a speaking order. However, I also find that the appellants have made good the alleged short payment by remitting the service tax amount of Rs.78,446/- along with interest payable Rs.26,978/- vide GAR-7 challan No.00132 on 19.10.2007 before issue of the impugned order. Under these circumstances, there is a force in the argument of the appellant so far as imposition of equivalent penalty is concerned. As per Section 78 of the Finance Act, 1994 where such service tax as determined under sub-section (2) of Section 73 and the interest payable thereon under Section 75 is paid within thirty days of the date of communication of the order determining such service tax, the amount of penalty liable to be paid by such person under this Section shall be twenty five percent of the service so determined. In view of the foregoing facts, I pass the following order. ORDER
I set aside the order-in-original No.75/2007 dated 15.11.2007 of the lower authority and direct the lower authority to issue a speaking order following principles of natural justice and keeping in view observations made above. The appeal is disposed of in the above terms.
3. From the above, it can be seen that Commissioner (A) has taken a view that there is no clear finding regarding suppression and he himself entertained an opinion that no suppression could have been alleged in this case warranting imposition of penalty under Section 78 of the Finance Act, 1994. Nevertheless, he has remanded the matter with a direction to pass a speaking order.
4. After the decision of the Honble Supreme Court in the case of MIL India Ltd. reported in 2007 (210) E.L.T. 188 (S.C.), according to the learned counsel, the Commissioner (A) could not have remanded the matter and therefore the appellant has filed appeal not only against the remand but also seeking dropping of further proceedings. According to the learned counsel, no suppression could have been invoked in this case since the appellant had shown the entire amount of service charges realized by them and there was a mistake in calculation of service tax. Learned AR submitted that the statutory requirement is that the appellant is required not only to indicate the amount collected but also calculate the service tax payable correctly and also submits that extended period was correctly invoked in this case.
5. I have considered the submissions made by both the sides. Other than stating that there was a mistake in calculating the amount, learned counsel could not really explain how the mistake happened. From the facts of the case and the records what emerges is that the appellants had filed the return correctly but made the mistake in calculation of tax payable and as soon as the same was pointed out and a show-cause notice was issued, the appellants paid the amount with interest. There is no specific finding that the mis-declaration was with intention to evade duty/tax. If the intention was to evade the tax, naturally the amount received would not have been declared correctly. Even accepting the submission that there was a mis-declaration on the part of the assessee in calculating service tax, the intent to evade tax does not flow from this submission. Therefore the fact remains that appellant paid the tax and interest after the issue of show-cause notice and what remains is only the dispute about the penalty. In the absence of any appeal filed by the department and the findings by the Commissioner (A) that there was no suppression on the part of the appellant and neither of the lower authorities have made an observation that there was mis-declaration, I find that this would be a fit case for waiver of penalty under Section 80 of Finance Act, 1994. In my opinion, no purpose could be served in remanding the matter, insofar as department has not filed an appeal. Further, in view of the Honble Supreme Courts decision which is being followed by this Bench, the Commissioner (A) having found no suppression, should have decided the matter finally instead of remanding the matter to the original adjudicating authority with a direction to pass a speaking order. The law requires the Commissioner (A) to act as an adjudicating authority and not to remand the matter when such orders are passed. Under these circumstances, I find that it would be appropriate to set aside the impugned order. Accordingly, the impugned order is set aside and the service tax paid with interest is confirmed as paid correctly and penalties imposed are set aside by invoking the provisions of Section 80 of Finance Act, 1994.
(Order dictated and pronounced in open court) (B.S.V. MURTHY) MEMBER TECHNICAL rv 4