Custom, Excise & Service Tax Tribunal
M/S Capital Vehicle Sales Ltd, Gurgaon vs Commissioner Of Service Tax, Delhi on 11 August, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160017 SINGLE BENCH COURT NO.1 Appeal No. ST/1163/2010 [Arising out of the Order-in-Appeal No. 224-MA-GGN-2010 dated 07.05.2010 passed by the CCE (Appeals), Delhi-III, Gurgaon) Date of Hearing/Decision: 11.08.2017 For Approval & signature: Honble Mr. Ashok Jindal, Member (Judicial) M/s Capital Vehicle Sales Ltd, Gurgaon Appellant Vs. Commissioner of Service Tax, Delhi Respondent
________________________________________________ Appearance Shri. Surjeet Bhadu, Advocate- for the appellant Shri. A.K. Saini, AR- for the respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO: 61554 / 2017 Per Ashok Jindal:
The appellant is in appeal against the impugned order seeking waiver of penalty imposed under Section 76 & 78 of the Finance Act, 1994.
2. The facts of the case are that the appellant is auto dealer to provide Business Auxiliary Service to various banks and non-banking financial institutions for providing loan to the buyers of the appellant. The appellant is receiving commission from the banks/non-banking financial institutions. The Revenue is of the view that the commission received by the appellant falls under the category of Business Auxiliary Service, therefore, during the period July 2003 to December 2004, the appellant did not pay service tax. The proceedings were initiated and investigation conducted in the month of February 2005, whereas, the appellant paid service tax along with interest before issuance of the show cause notice. Thereafter, on 31.07.2007, a show cause notice was issued to appropriate the amount already paid by the appellant along with interest and to impose penalty under Section 76 & 78 of the Finance Act. After adjudication both the penalties were confirmed on the appellant. Aggrieved from the said order, the appellant is before me seeking dropping the penalty imposed on them.
3. The ld. Counsel for the appellant submits that during the course of investigation, the appellant itself paid service tax along with interest and the same has been intimated to the department, therefore, in terms of Section 73 (3) of the Act, no show cause notice was required to be issued to them. He further submits that there were divergent views of this Tribunal on the issue whether the commission received by the appellant falls under the category of Business Auxiliary Servcies or not? Therefore, the extended period of limitation is not invocable. In that circumstances, it is prayed that the waiver of penalty be granted under Section 80 of the Finance Act,. To support this contention he relied on the decision of this Tribunal in the Case of Nair Coal Servcies Ltd. reported in 2016 (45) STR 529 (Tri. Mum.), Arpanna Automotive Pvt. Ltd. reported in 2016 (43) STR 397 & Continental Foundation JT. Venture reported in 2007 (216) ELT 177 (SC).
4. On the other hand, the Ld. AR opposed the contention of the ld. Counsel and submits that as the appellant did not pay 25% of penalty alongwith the amount of service tax and interest , therefore, the provisions of Section 73 (1)(a) were invoked and accordingly, they are liable to be penalised. He also took the support of this Tribunal in the case of K. Madhav Kamath Brother & Co. reported in 2015 (38) STR 249 (Tri. Bang.).
5. Heard both the sides.
6. In this case, the appellant is not contesting the demand to service tax along with interest. The appellant is seeking only waiver of penalty imposed under Section 76 & 78 of the Act, on the ground that the extended period of limitation is not invocable. Moreover, in terms of Section 73 (3) of the Act, the proceedings were required to be dropped against the appellant.
7. The ld. AR relied on the decision of this Tribunal in the case of K. Madhav Kamath Brother & Co. (Supra). The facts of this case are not relevant facts of this case. In that circumstances, this Tribunal held that demand for the extended period of limitation is not challenged whereas, the appellant has taken the ground that the extended period of limitation is not invocable. Reliance placed by the Ld. AR has not relevance facts of this case.
8. Further, I find that in the case of Nair Coal Services Ltd.. (supra), this Tribunal held that as before issuance of the show cause notice itself during the course of investigation, the appellant themselves paid service tax along with interest and in that circumstances, in terms of provisions of Section 73 (3) of the Act, no proceedings were required to be initiated against the appellant. In this case, the appellant has paid service tax along with interest on pointing out by the department, during the course of investigation, therefore, the show cause notice was not required to be issued in terms of section 73 (3) of the Act. Further, I find that there was contrary decision of this Tribunal on the issues, no penalty can be imposed in the light of the decision of Arpanna Automotive Pvt. Ltd. (Supra).
9. Further I find that Honble Apex Court in the case of Continental Foundation Jt. Venture (Supra) has held that when there was divergent view on the issue, the extended period of limitation cannot be invoked. Therefore, I hold that the penalty is not imposable on the appellant.
10. Accordingly, penalties imposed on the appellant are set aside.
In result, the appeal is allowed.
(Dictated and pronounced in the open court) Ashok Jindal Member (Judicial) rt 2 ST/1163/2010