Customs, Excise and Gold Tribunal - Bangalore
Sri Venkateswara Cable Network vs The Commissioner Of Customs And Central ... on 24 March, 2008
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against Order-in-Appeal No. 07/2005 (T) ST dated 05.10.2005 passed by the Commissioner of Customs and Central Excise (Appeals) Guntur.
2. Shri Ch. Venkateswara Rao, learned Advocate, appeared on behalf of the appellants and Shri Raja Dass, learned SDR, for the Revenue.
3. We heard both sides.
4. The appellants are the "Cable Service" providers to the subscribers. Revenue proceeded against them for non-payment of service tax. The Deputy Commissioner demanded an amount of Rs. 33,209/- towards service tax together with interest and imposed penalties of Rs. 33,209/- under Section 76 and Rs. 1000/- under Section 77. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) has stated that the appellants had taken Service Tax registration during the month of September, 2002. Therefore, he is legally bound to collect service tax from his subscribers and pay the same to the Government. Their explanation that their state association is negotiating the matter with the Government was not accepted. Hence, the Commissioner (Appeals) upheld the order of the Power authority. The learned Advocate submitted that the appellants took out registration in September 2002. They had already paid service tax of Rs. 17,175/- along with interest of Rs. 1,157/- for the period from 16.08.2002 to 31.03.2003. Similarly, for the period from 01.04.2003 to 30.11.2003 also they had paid the service tax along with the interest. It was urged that the show cause notice for the period from 16.08.2002 to May 2003 was issued on 08.01.2004 and same is time bar partly. He said the extended period cannot be invoked. In Para 7 of the Adjudication Order it is clearly recorded that the service tax was paid on 28.07.2003 and 08.12.2003, however the show cause notice was issued on 08.01.2004. Therefore, the longer period cannot be invoked. In Para 2 of the Adjudication order, the Deputy Commissioner judicially held that reason put forth by the appellant for their failure to pay the correct amount of tax and submission of returns in form ST 3 is reasonable and therefore he does not propose to impose any penalty on the appellants under Section 78 of the Finance Act. Having given such a judicious finding, the Deputy Commissioner should not have imposed any penalty under Section 76 or should have a nominal penalty which he has not done. Having given the said finding then under Section 80 of the Finance Act, the appellants should have been given protection instead of imposing penalty under Section 76. Though the Commissioner (Appeals) has mentioned all the four decisions cited by the appellants in their appeal and also cited the pleas made by the appellants that the Adjudicating Authority can use his discussion and impose only minimum penalty under Section 76. He has not given any finding on their pleas. Therefore, it was prayed to set aside the impugned order.
5. On a careful consideration of the matter, we find that the appellant did not discharge the service tax liability in time as their association was pursuing the matter with the Government. This explanation has not been accepted by the lower authorities. However, from Para 7 of the Adjudication order of the lower authority, it is very clear that the appellant had already discharged the service tax liability along with interest even before the issue of show cause notice. In view of the above fact, the imposition of penalties is not warranted. The lower authority could have exercised his powers under Section 80 of the Finance Act, 1994 to modify or set aside the penalties. Having regard to the facts and circumstances of the case, we set aside the penalties imposed. The appeal is allowed in the above terms.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)