Custom, Excise & Service Tax Tribunal
M/S. Trinetra Cable vs Commissioner Of Service Tax on 7 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. 186 of 2010
[Arising out of Order-In-Appeal No. 93/ST/DLH/2009 dated 9.11.2009 passed by Commissioner (Appeals), Central Excise, Delhi I]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. V Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Trinetra Cable Appellants
Vs.
Commissioner of Service Tax Respondent
Delhi Appearance:
Shri A K Batra, CA with Shri Ruchir Bhatia and Shri Varun Gaba, Advocates for the Appellants Shri Sanjay Jain, DR for the Respondent CORAM:
Hon'ble Ms Archana Wadhwa, Member (Judicial) Hon'ble Mr. V Padmanabhan, Member (Technical) Date of Hearing : 22.09.2016 Date of Decision: 07.11.2016 FINAL ORDER NO . 54817 /2016 Per V Padmanabhan:
The appellant is a service provider of net and cable operator services. The appellant used to receive services from M/s. Win Cables and Data Com Pvt. Ltd. who is a Multi System Operator (MSO). The appellant collects subscription charges from the subscriber and is liable to Service Tax on such amounts. They were also providing international services and receiving commission from MSO. The department on the basis of investigation conducted against the appellant concluded that they had not accounted the subscription amount collected from the customers in full and evaded Service Tax to the extent of Rs.2,32,772/- for the period August, 2002 to March, 2005 on the commission amount received by the appellant from MSO, the Department was of the view that Service Tax is required to be paid as under Business Auxiliary services and amount of Rs.42,259/- was received as commission on which the Service Tax amount of Rs.3,874/ were found to be unpaid. Proceedings were initiated vide Show cause notice dated 19.9.2007 for demands for the demanding Service Tax. Amounts unpaid as above which was confirmed by the order-in-original dated 6.8.2008, which also levied the penalties under sections 76, 77 and 78 of the Finance Act, 1994. In the impugned order passed by the Commissioner (Appeals) the ST demands were upheld. While he Commissioner (Appeals) upheld the penalties levied under 77 and 78, he set aside the penalty under section 76.
2. Hence, the present appeal.
3. Heard Shri A K Batra, learned Chartered Accountant with Shri Ruchir Bhatia and Shri Varun Gaba, learned Advocates appearing for the Appellants and Shri Sanjay Jain, learned DR appearing for the Revenue.
4. Learned Advocate appearing for the appellant submitted that the entire Service Tax demand stand deposited by the appellant along with interest and 25% of penalty imposed under section 78. The penalty imposed under section 77 and 78 together also stand paid. He further submitted that the payment of Service Tax is not being challenged. However, he prayed for waiver of penalty imposed.
5. We note that the Service Tax amount on cable operator was introduced on 16.8.02. In the present case, the demand of Service Tax covers the period from the date of introduction of Service Tax on cable TV till 31.3.05. The department during the investigation has noticed that out of total amounts collected by the appellant from the subscriber, they have retained certain part of this and paid the balance to the Multi System operator from whom the appellant has received the cable signals for further distribution to subscribers. The appellant have admitted that they have not paid the Service Tax on the ground which was paid to the MSO under the bonafide belief that they were required to pay Service Tax only on the amount retained by them. However, on being pointed out, they have deposited the Service Tax demand along with interest and 25% penalty payable under section 78. While they are not pursuing the challenge against the Service Tax demand, their prayer is that penalties imposed on them may be waived under section 80. The cable TV services were introduced in the Act for Service Tax in August 2002. The present controversy of non payment of Service Tax has arisen soon after the introduction of the new service. The claim of the appellant that they were under a bonafide belief that they are liable to Service Tax is limited to commission retained by them seems to be a reasonable intention. As per their belief the Service Tax stand paid on the commission amount retained by them. Section 80 of the Finance Act, 1994, which was a part of the statute book during relevant time, is given below for ready reference:
80. Notwithstanding anything contained in the provisions of section 76, section 77 or section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure
6. Section 80 provides for waiver of penalties liable to be imposed under section 76, 77 and 78 if the assessee proves that there was reasonable cause for the said failure. In the facts and circumstances of the present case, where the detection of non payment of Service Tax was in the initial months after the introduction of Service Tax on cable TVs services, we are of the view that this is a fit case to waive the penalties under the then section 80 of the Finance Act, 1994.
7. In the light of above discussions, we uphold the demand of Service Tax and interest which already stand paid and is not being contested. We waive the payment of penalty under section 76, 77 and 78 under section 80 of the Finance Act, 1984. The appeal is disposed of in the above terms.
(pronounced in the open court on 7/11/16 )
( Archana Wadhwa ) Member(Judicial)
( V Padmanabhan)
Member(Technical)
ss
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