Custom, Excise & Service Tax Tribunal
M/S. Flexi Tuff International Ltd vs C.C.E.&S.T., Indore on 12 March, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 13.02.2014
Date of Decision 12.03.2014
For Approval &Signature :
Honble Mrs. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. ST/55893/2013-ST[SM]
[Arising out of Order-in-Appeal No.IND/CEX/000/APP/344/12, dated 30.1-.2012, passed by C.C.E.(Appeals), Jaipur-II]
M/s. Flexi Tuff International Ltd. Appellants
Vs.
C.C.E.&S.T., Indore Respondents
Appearance None - for the appellants Shri RK Mishra, DR - for the respondents CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Final Order No.__50977__, dated 12.03.2014 Per Honble Mrs. Archana Wadhwa :
The appellants have made a prayer to decide the issue on merits, in as much as they are only assailing the imposition of penalty imposed upon them under Section 78 of the Finance Act, 1994, without any contest to confirmation on demand. Nobody appeared on behalf of the appellants. Accordingly, I have heard Shri RK Mishra, Ld. Departmental Representative appearing for Revenue and I have gone through the impugned order.
2. The appellants are a company engaged in the manufacture of export of plastic bags and sacks. They were also receiving the GTA services and in terms of Notification No.35/2004-ST, dated 03.12.2004, were discharging their service tax liability, after availing 75% of abatement. Scrutiny of ST-3 returns filed by them for the period April, 2009 to September, 2009 and October, 2009 to March, 2010, vis-a-vis, the scrutiny of the trial balance-sheet for the year 2009-10 revealed that the appellants had availed the excess GTA services on which they have paid less service tax. Accordingly, demand of service tax of Rs.6,30,587/- (Rupees six lakh thirty thousand five hundred and eighty seven only) was raised by Show Cause Notice dated 17.09.2010. However, during adjudication, the Asst. Commissioner observed that in as much as most of the GTA services were availed in respect of their export activities, which were exempted from payment of service tax, demand to the tune of Rs.1,08,271/- (Rupees one lakh eight thousand two hundred and seventy one only) is liable to be confirmed. He accordingly after confirmation of the above amount also imposed penalties under Sections 76 and 78 of the Finance Act, 1994. On appeal, Commissioner (Appeals) set aside the penalty imposed under Section 76, but upheld the penalty of Rs.1,08,271/- imposed under Section 78 of the Act with an option to the appellants to pay 25% of the penalty if the duty demand is deposited within 30 days of the order.
3. It is seen that the said demand arose on account of comparison of the availed GTA services as reflected in the trial balance-sheet with the ST-3 returns. As per the appellants since most of the services were being availed by them in respect of exports, the said short levy has occurred on account of wrong calculation and without any intention. As soon as the same was pointed out by the audit, they deposited the short paid service tax along with interest of Rs.22,286/- (Rupees twenty two thousand two hundred and eighty six only), in which case the benefit of Section 80 should be extended to them and the penalty should be set aside.
4. I find that the quantum of GTA services availed by the appellants and as reflected by them in their trial balance-sheet is much on the higher side and there is definitely a scope for wrong computation and wrong calculation. The appellants having deposited the service tax immediately on being pointed by the audit, along with interest, cannot be held to be having any mala fide intention. In such a scenario, I am of the view that the benefit of Section 80 of the Act can be extended to the appellants and the penalty is required to be set aside. Accordingly, while confirming the service tax & interest as not contested, I set aside the penalty imposed upon the appellants and allow the appeal to that extent.
5. The appeal is disposed of in the above terms.
Pronounced on _________________________ (Archana Wadhwa) Member (Judicial) SSK -4-