Custom, Excise & Service Tax Tribunal
Heavy Engineering Corporation Ltd vs Commissioner Of Central Excise, & S. ... on 1 December, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. ST/494/2011
(Arising out of Order-in-Appeal No. 45/RAN/2011 dated 11.08.2011passed by the Commissioner of Central Excise & S. Tax, Ranchi.
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, 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?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Heavy Engineering Corporation Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, & S. Tax, Ranchi.
Respondent (s)
Appearance:
Shri S. P. Marjumder, Advocate for the appellant (s) Shri A Roy, Supdt, (AR) for the Revenue (s) CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision: 01.12.15 Date of Pronouncement: 01.12.15 ORDER No. FO/A/75718/15 Per Shri H.K.Thakur This appeal has been filed by the appellant against OIA No. 45/RAN/2011 dt 11/8/2011 passed by Commissioner (A) Ranchi upholding the OIO No. 17/ST/C/2010 dt 31/11/2009 passed by the Adjudicating Authority.
2. Sh. S.P Majumder (Advocate) appearing on behalf of the appellant argued that appellant is a Public Sector Undertaking and had received intellectual Properly Services, from abroad as per an agreement dt 23/1/2003 which appellant entered into with the foreign service provider. That appellant is not contesting the issue on merits and the entire Service tax an reverse charge basis, alongwith interest, was paid before the issue of show cause notice as soon as pointed by the department. That Sec 78 penalty was not invokable as appellant was also eligible for Cenvat Credit on whatever Service tax was payable on reverse charge basis. That payment for the said Services were made by appellants headquarters & appellant was not aware of such payment. That due to unawareness on the port of the appellant Service tax an reverse charge basis was delayed and that their case is covered by Sec 80 of the Finance Act 1994. Learned Advocate relied upon the following case laws.
(i) Atma Ram Auto Enterprises Vs CCE Kanpur [2015 (37) STR 405 (Tri-Del)]
(ii) CCL Products (India) Ltd Vs CCE & ST (A) Guntur [2012 (27) STR 342 (Tri-Bang)]
(iii) U.G. Sugar & Industries Ltd Vs CCE Meerut-II [2011 (21) STR 531 (Tri-Del)]
3. Sh. A. Roy Supdt (AR) appearing on behalf of the Revenue made the bench go through show cause notice dt 10/11/08 & Para- 18 of the OIO dt 31/11/2009 to argue that extended period was invokable even if Sec 78 penalty was not imposed upon the appellant. Leaned AR thus strongly defended the order passed by the lower authorities. Learned AR relied upon the case law of Indo foreign (Agents) Pvt Ltd Vs UOI [2011 (22) STR 395 (Cal)].
4. Heard both sides & perused the case records Appellant has not contested the issue on merits and the entire Service tax, alongwith interest, was paid before the issue of show cause notice. Appellant has argued that there was sufficient cause for nonpayment of service tax on reverse charge basis as payments were made by the Headquarters of the appellant. It is observed from the case records that Sec 78 penalty under the Finance Act 1994 has not been imposed and appellant was entitled to cenvat credit of Service tax payable on intellectual properly Services received from abroad. There can not be any gain to the appellant in not paying the same is admissible as cenvat credit. It the case of Atma Auto Enterprises Vs CCE Kanpur (Supra) CESTAT under similar factual matrix it was held as follows in Para-6 6.?As regards the Revenues appeal, it is seen that the Commissioner (Appeals) has categorically observed that there was no mens rea or intention on the part of the appellants to evade Service Tax which they had paid along with interest even before the issue of Show Cause Notice. In these circumstances, when it is held that there was no mens rea on the part of the appellants extending the benefit of Section 80 cannot be said to be illegal, perverse or even unreasonable. The Revenue also seems to be conceding the absence of mens rea when it is contended by them that mens rea is not a pre-requisite for penalty under Section 76. It is pertinent to mention that the impugned order cannot be overruled merely because some other equivalent authority may have come to a different conclusion with regard to extending the benefit of Section 80 in the given circumstances. To set aside the impugned order, Revenue has to show that the said order is illegal, perverse or unreasonable with regard to extending the said benefit in the given circumstances. The Revenue has evidently failed to do so. Consequently the Revenues appeal also does not sustain. The entire amount of Service tax & interest was paid before the issue of show cause notice after the department pointed out the same. Appellant has a reasonable cause that the payments made to overseas Service provider by their headquarters was not within their knowledge. As soon as appellant was made aware the Service tax & interest liability was paid. Case law relied upon by Learned AR was not with respect to section 80 of the FA 1994 appellants case is thus covered by the provisions of Sec 80 of the Finance Act 1994 and imposition of penalties under Sec 76 & 77 of the Finance Act 1994 are set aside.
5. Appeal filed by the appellant is allowed to the extent indicated herein above.
(Operative part of the order was pronounced in the open court.) (H.K.THAKUR) MEMBER (TECHNICAL) TUSHAR KUMAR 5 Appeal No.ST/494/11