Custom, Excise & Service Tax Tribunal
Cce & St, Ltu, Chennai vs M/S. Chemplast Sanmar Limited on 26 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
ST/41850/2015
(Arising out of Order-in-Appeal No. 40/2015 dated 01.06.2015 passed by the Commissioner of Central Excise & Service Tax, LTU, Chennai).
CCE & ST, LTU, Chennai : Appellant
Vs.
M/s. Chemplast Sanmar Limited : Respondent
Appearance Shri L. Paneerselvam, AC (AR), for the Appellant Ms. Radhika Chandrasekar, Adv., for the Respondent CORAM Honble Shri P. K. Choudhary, Judicial Member Date of Hearing : 08/04/2016 Date of Pronouncement: 26.05.2016 FINAL ORDER No. 40850 / 2016 Revenue is in appeal against the impugned order on the only ground that the penalty imposed under Section 78 vide OIO has been set aside by the Ld. Commissioner (Appeals).
2. The Ld. AR Shri L. Paneerselvam, AC, submits that the respondent assesse had received services from foreign firms who do not have any office in India under Business Auxiliary Services. He further submitted that though the respondent assesse is assessed by the LTU and is well aware of all the statutory obligations, still it was only when the internal audit team pointed out the liability within the respondent assessee paid the entire demand of service tax on 05.12.2010. The adjudicating authority imposed equal penalty under Section 78. On appeal, the Ld. Commissioner (Appeals) allowed the appeal and set aside the penalty. The Review Committee reviewed the order on 31.08.2015 and directed the department to file an appeal against the OIA before this Tribunal, on the ground that the case law M/s. Atwood Oceanics Pacific Ltd. Vs. CST, Ahmedabad 2013 (32) STR 756 (Tri.-Ahmd.) relied upon by the Ld. Commissioner (Appeals) has not been accepted by the department and a civil appeal has been filed in the Honble Supreme Court and the same has been admitted vide C.A. No. D7374/2013 reported in 2014 (34) STR 3172 (SC). He further submitted that the respondent assesse while filing the appeal before the Ld. Commissioner (Appeals) had only disputed the levy of equal penalty under Section 78 and did not dispute the order confirming the demand by invoking the extended period of limitation. Having confirmed the demand by invoking the extended period of limitation, equal penalty under Section 78 should automatically fail as there is no description in imposition of mandatory penalty. It is become practice as per Section 73 (4) the assessees are voluntarily paying tax on being pointed out by the audit party they should pay tax along with 1% penalty till the date of payment or maximum penalty upto 25% of tax. If this is agreed by the appellant, there will be no show cause notice issued by; the department. He also relied on the judgment of the Apex Court in the case of UOI Vs. Dharmendra Textiles Processors 2008 (231) ELT 3 (S.C).
3. The Ld. Counsel appearing on behalf of the respondent assesse Ms. Radhika Chandrasekar, Advocate, reiterated the findings of the Ld. Commissioner (Appeals) and submitted copies of the citations which were already relied upon before the Ld. Commissioner (Appeals) such as:-
1. CCE & ST, LTU, Bangalore Vs. Adecco Flexion Workforce Solutions Ltd.
2012 (26( STR 3
2. M/s. Atwood Oceanics Pacific Ltd. Vs. CST, Ahmedabad 2013 (32) STR 756 (Tri.-Ahmd.)
3. Lynx Communication Systems Pvt. Ltd. Vs. CCE, Vadodara 2013 (31) STR 331
4. Blue Star Ltd. Vs. CCE, Vadodara 2013 (31) STR 28
5. Super Star Security services Vs. CCE, Chennai 2012 (30) STR 700
6. M.R Coatings Pvt. Ltd. Vs. CCE, Rajkot 2013 (30) STR 76
7. Bombay Intelligence Security India Ltd. Vs. CST 2015 (40) STR 158 She further submitted that Section 80 for reasonable cause as per Rule 3 (3) of Import of Service Rules, services should have been received by the recipient in India. In the instant case, entire services have been provided outside India and not received in India. So the recipient was under the impression that there were no liabilities to pay. She relied on the AARPP (to be given by the respondent) and prayed for upholding of OIO and rejection of the Revenues appeal. In her counter, she also submitted that the Ld. AR was referring to Section 73 (4) but the same is not applicable to this case and it was not raised in the grounds of appeal also.
(Order Pronounced in the open court on 26.05.2016 ) (P.K. CHOUDHARY) Judicial Member BB 1