Custom, Excise & Service Tax Tribunal
M/S. Cauvery Stones Impex Pvt. Ltd vs Commissioner Of Central Excise, Salem on 2 December, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
ST/S/40579/2013 and ST/40814/2013
[Arising out of Order-in-Appeal No.93/2012-ST, dated 28.12.2012 passed by the Commissioner of Central Excise (Appeals) Salem]
FOR APPROVAL AND SIGNATURE:
Honble Shri Pradip Kumar Das, Judicial Member :
Honbe Shri Mathew John, Technical Member :
1. Whether Press Reporters may be allowed to see 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 the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s. Cauvery Stones Impex Pvt. Ltd.
Appellant
Versus
Commissioner of Central Excise, Salem
Respondent
Appearance:
Shri R. Srinivasan, Cons. Shri K.P. Muralidharan, Supdt.-AR For the Appellant For the Respondent CORAM:
Honble Shri Pradip Kumar Das, Judicial Member Honbe Shri Mathew John, Technical Member Date of hearing : 02-12-2013 Date of decision : 02-12-2013 FINAL ORDER NO.40617/2013 Per Mathew John:
After hearing both sides, we find that both the stay petition and appeal can be taken up together for final disposal and both the sides were heard accordingly. Consequently, the Stay application is disposed of.
2. The appellant is an exporter of granites. He engaged the services of foreign agents for selling of the goods abroad and pay commission to such agents. Revenue demanded service tax on such commission paid under the reverse charge mechanism as provided under Section 66A of the Finance Act, 1994. After adjudication and first appeal, there is a demand of Rs.3,22,091/-confirmed against the appellant along with interest and penalty of rs.5,000/- under Section 77 of the Finance Act, 1994 and Rs.22,000/- under Rule 7C of the Service Tax Rules, 19494 read with Section 70 of Chapter V of the Finance Act, 1994. There is a further penalty of Rs.3,22,091/- under Section 76 of Chapter V of the Finance Act, 1994.
3. Arguing for the appellant, the learned Counsel submits that the appellant was under the bonafide impression that the activity had not been subject to service tax because the entire activity of the agent takes place abroad. That is the reason why they did not pay service tax liability but is praying that the penalty imposed should be set aside.
5. Learned Authorised Representative for the Revenue pointed out one decision in this regard vide Final Order No.1072/09, dated 20.08.2009 in Appeal No.ST.73/2008 in the case of M/s. Needle Industries (I) Pvt. Ltd. Vs Commissioner of Central Excise, Salem. The said decision also is to the effect of confirming the duty demand but set aside the penalties imposed under Section 77 and 78 of the Finance Act, 1994.
6. In the instant case, there is also an additional penalty under Rule 7C of the Service Tax Rules, 19494 read with Section 70 of Chapter V of the Finance Act, 1994. We feel that the principle adopted under Section 77 and 78 would be extended to this penalty as well. Therefore, we confirm the service tax demand along with interest and all penalties involved are set aside. Thus, the appeal is partially allowed. Stay petition also gets disposed of.
(Dictated and pronounced in open court)
(MATHEW JOHN) (PRADIP KUMAR DAS)
TECHNICAL MEMBER JUDICIAL MEMBER
ksr
DRAFT
Remarks
I
II
III
Date of dictation
02.12.2013
Draft Order - Date of typing
03-12-2013
Fair Order Typing
Date of number and date of dispatch
2
ST/S/40579/2013 and ST/40814/2013