Custom, Excise & Service Tax Tribunal
M/S Ifcons Infrastructure Ltd vs Commissioner Of Service Tax, Mumbai-Ii on 31 March, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. I APPEAL NO. ST/105/12-Mum APPLICATION NO. ST/CO/78/12 (Arising out of Order-in-Original No. 30/ST-II/WLH/2011 dated 15.12.2011 passed by the Commissioner of Service Tax, Mumbai-II.) For approval and signature: Honble Mr. M.V. Ravindran, 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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M/s Ifcons Infrastructure Ltd.
Appellant
Vs.
Commissioner of Service Tax, Mumbai-II
Respondent
Appearance:
Shri Keval Shah, C.A.
for Appellant
Shri A.K. Goswami, Addl. Commr. (A.R.)
for Respondent
CORAM:
HONBLE SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL)
HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 31.03.2016
Date of Decision: 31.03.2016
ORDER NO.
Per: M.V. Ravindran:
This appeal is directed against Order-in-Original No. 30/ST-II/WLH/2011 dated 15.12.2011 passed by the Commissioner of Service Tax, Mumbai-II.
2. The relevant facts that arises for consideration are the appellant herein had rendered commercial or industrial construction services to M/s Reliance Industries Ltd. for the construction of a jetty at Yanam and they did not discharge the Service Tax liability. The Officers of DGCEI investigated the issue. During the discussion with DGCEI, the appellant herein were convinced that Service Tax liability arises and they had immediately discharged the Service Tax liability and interest thereof on 08.05.2008 and shown the payments receipt of such services under the category of exempted services. It is seen that jetty was to handle the logistics of project Cargo and equipment for setting up an onshore Gas Terminal; they claimed it is transport terminal which exempt from payment of tax. The adjudicating authority after following the due process of law confirmed the demand of Service Tax liability and the interest thereof and also imposed penalties under Section 77 & 78 of the Finance Act, 1994.
3. Learned Chartered Accountant would submit that Service Tax liability with interest having been discharged, the penalties imposed be set aside, the appellant having bonafide belief regarding non taxability and they were under impression that these services are exempted services and that they had declared the same under as exempted services.
4. Learned Departmental Representative on the other hand would submit that in the appellants own case this Tribunal had held on Onshore Terminal is not a Transport Terminal hence is not excluded from levy of Service Tax. In the Order dated 04.04.2014, this Bench have upheld the Order-in-Original in toto which would mean the penalty liability is also upheld. He would draw our attention in the case with a plea that appeal should be dismissed. He would also submit that Hon'ble High Court of Karnataka in the case of K. Madhav Kamath Brother & Co. v. Asstt. Commissioner - 2015 (38) S.T.R. J366 (Kar.) held that just because the Service Tax liability was paid in advance prior to issuance of show-cause notice, it cannot be held that the asseessee need not be visited with the penalty.
5. We considered the submissions made by both sides and perused the records.
6. Since the appellant is not contesting the Service Tax liability and the interest thereof, we uphold the impugned order to that extent.
7. As regards the penalty, we find that there is no dispute that appellant had filed return with the Department indicating use of jetty as exempted services. The appellant could have done so is an bonafide belief that Service Tax liability does not arise on this jetty, as the same is used for unloading of Cargo or equipment for setting up a onshore terminal and can be classified under category of Transport Terminal which is exempted from tax liability. We are of the view, if the appellant had declared receipt of payment and claimed the said payment as received for exempted services, there could be a bonafide belief that tax liability does not arise. In our view the appellant has made out a case for setting aside the penalties. As regards the case laws relied upon by the leaned Departmental Representative, we find in the case of Afcons Infrastructure Ltd. Order dated 04.04.2014, the issue was regarding construction Onshore Terminal in which case the appellant had not intimated the Department about the receipt of mobilisation advance. The facts in that case are different and in the case in hand is different than the case wherein Tribunal confirmed the demand with interest and penalties. As regards the decision of Hon'ble Karnataka High Court in the case of K. Madhav Kamath Brother & Co. (supra), we find that the Tribunal has recorded that there was no explanation as to the so called bonafide mistake or non discharge of the Service Tax liability, hence reasoning given by Hon'ble High Court in upholding penalties is correct in that case. In the case in hand, there is a specific finding that the appellant had received amounts recorded and reported in return that they are for exempted services, which would mean that the appellant could have entertained a bonafide belief that services rendered by may be exempted.
8. In view of the foregoing, we hold that the appellant had made out a case for setting aside the penalties imposed on them by invoking the provision of Section 80 of the Finance Act, 1994. We set aside the penalty imposed on the appellant while upholding the Service Tax liability and the interest thereof. Cross objection is also disposed of.
(Operative portion of the order pronounced in open Court) (C.J. Mathew) (M.V. Ravindran) Member (Technical) Member (Judicial) Sp 4 APPEAL NO. ST/105/12-Mum