Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Wings Travels on 18 May, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. ST/665 & 667/11-Mum (Arising out of Order-in-Original No. 10/P-III/STC/COMMR/2011-12 dated 14.09.2011 passed by the Commissioner of Central Excise, Pune-III.) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No
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 : No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
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Commissioner of Central Excise, Pune-III
Appellant
Vs.
M/s Wings Travels
Respondent
Appearance:
Shri B. Kumar Iyer, Supdt. (A.R.)
for Appellant
Shri Sagar Shah, C.A.
for Respondent
CORAM:
HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL)
HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 18.05.2016
Date of Decision: 18.05.2016
ORDER NO.
Per: Ramesh Nair:
The fact of the case is that the appellant is providing services under Rent-a-Cab services and they are registered under the Service Tax Department. The appellant have not discharged the Service Tax from April, 2007 onwards on due date. The Department vide letter dated 25.01.2008 asked the appellant to confirm the fact and to produce the evidence of payment of the Service Tax during the material time. The appellant, in response vide letter dated 13.02.2008 furnished month wise amount of Service Tax paid up to the period September, 2007. The Department further investigated the case and found that the Service Tax for the period from 01.04.2007 to 31.03.2008 was not paid. During the investigation the appellant have been paying the Service Tax in different instalment, the entire Service Tax dues were paid till 23.04.2008. However, a show-cause notice was issued proposing the demand of Rs. 2,13,01,211/- for the period 01.04.2007 to 31.03.2008. In the adjudication the learned Commissioner held that there is no issue of payment of Service Tax or interest in this case as these have already been paid. The only issue decided by the learned Commissioner that he imposed the penalties under Section 76, 77 & 78 of the Finance Act, 1994. The learned Commissioner after considering the fact that the major part of the Service Tax dues was paid even before initiation of the enquiry, accordingly a penalty of Rs. 31,52,030/- was imposed under Section 78 with option for reduced penalty to 25%, the penalty under Section 76 & 77 was not imposed. Being aggrieved by the Order-in-Original the appellant filed an appeal only for waiver of penalty under Section 78 of the Finance Act, 1994. Revenue also filed an appeal for confirmation of Service Tax Rs. 31,52,030/- and for imposition of penalty under Section 76.
2. Shri Sagar Shah, learned Chartered Accountant appearing on behalf of the appellant submits that the learned Commissioner has passed the order without considering the submission of the appellant that as per Section 73(3) there is no necessity of adjudicating proceedings. Consequently no penalty is imposable. He submits that the appellant have discharged the entire Service Tax along with interest before issuing of the show-cause notice without any protest. Therefore in terms of Section 73(3) no show-cause notice should have been issued. As regards Revenues appeal he submits that on the very same grounds that the case should have been considered under the Section 73(3), the Revenues appeal will not survive as no adjudication was required in the present case.
3. Shri B. Kumar Iyer, Learned Superintendent (Authorised Representative) appearing on behalf of the Revenue submits that the adjudicating authority though imposed the penalty under Section 78 but did not confirm the Service Tax liability and also not imposed the penalty under Section 76, so to that extent the order is not proper and legal.
4. We have carefully considered the submissions made by both the sides. We find that there is no dispute that the Service Tax along with interest was paid by the appellant before issuance of show-cause notice, there is no contest on the said payment. In these circumstances the case of the appellant is squarely covered under Section 73(3) of the Finance Act, 1994 which is reproduced below:-
Sec. 73(3) provides that where any service tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid:
provides that the Central Excise Officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner, specified in this section, and the period of one year referred to in sub section (1) shall be counted from the date of receipt of such information of payment.
Explanation (1)- For the removal of doubts, it is here by declared that the interest under section 75 shall be payable on the amount paid by the person under this sub section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the Central Excise Officer, but for this sub section.
Explanation (2)- For the removal of doubts, it is here by declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of Service Tax under this sub-section and interest thereon. From the above provision, it can be seen that if the assessee pays all the Service Tax along with interest and without any contest the Department is not supposed to issue any show-cause notice. In this case the appellant paid the Service Tax along with interest thereafter the Department should not have issued any show-cause notice. In absence of show-cause notice, no adjudication proceedings required to be carried out. Consequently, neither any requirement of confirmation of Service Tax paid by the appellant nor any imposition of penalty under any Section. We are therefore of the considered view that the case of the appellant is squarely covered by the provision of Section 73(3), therefore the penalty imposed under Section 78 is set aside. As per the above discussion the Revenues appeal also does not survive. Therefore, the Revenues appeal is dismissed. The payment of Service Tax along with interest stand maintained. Appeal of the assessee is allowed and Revenues appeal is dismissed.
(Operative portion of the order pronounced in open Court) (C.J. Mathew) (Ramesh Nair) Member (Technical) Member (Judicial) Sp 5 APPEAL NO. ST/665 & 667/11-Mum