Custom, Excise & Service Tax Tribunal
Cce, Ludhiana vs M/S Grewal Builders Pvt. Ltd on 10 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 10.7.2015
Appeal No. ST/697/2009 with ST/CO/216/2009-CU(DB)
(Arising out of Order-in-Appeal No. 105/CE/Ldh/2009 dated 25.5.2009 passed by the Commissioner (Appeals), Central Excise, Chandigarh)
For Approval & Signature :
Honble Mr. R.K. Singh, Member (Technical)
Honble Ms. Sulekha Beevi, C.S., 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?
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordships wish to see the fair copy of the order?
4.
Whether order is to be circulated to the Department Authorities?
CCE, Ludhiana Appellant
Vs.
M/s Grewal Builders Pvt. Ltd. Respondent
Appearance:
Shri M.R. Sharma, D.R. - for the Appellant
None - for the Respondent
Coram :Honble Mr. R.K. Singh, Member (Technical)
Honble Ms. Sulekha Beevi, C.S., Member (Judicial)
F. Order No.52345/2015
Per R.K. Singh :
Revenue is in appeal against order-in-appeal dated 25.5.2009 which upheld the service tax demand of Rs.8,981/- along with interest and also penalty under Section 78 which was reduced to 25% of Rs.8,981/- on the ground that demand of Rs.8,981/- was paid before the issuance of Show Cause Notice but set aside the penalty under Section 76 & 77 on the ground that when penalty 78 has been imposed the penalty under Section 76 & 77 could not be imposed simultaneously. In addition the impugned order-in-appeal did not sustain the demand amounting to Rs.92,998/- on the ground that the appellant had claimed that the amount on which demand of Rs.92,998/- was confirmed pertained to the service of construction of residential complexes which was not taxable during the relevant time as construction of residential complex service became taxable from 16.6.2005. The period of demand is 2001-2002 to 2004-2005. The Revenue is in appeal on the ground that :
(i) The Commissioner (Appeals) has not given any basis as to how the said amount relates to construction of complex service as the respondent had not given any evidence to that effect;
(ii) The observation of the Commissioner (Appeals) that penalty under Section 76 and 78 could not be imposed simultaneously was not legal and proper as during the relevant period both these penalties were not mutually exclusive and;
(iii) Penalty under Section 77 was also imposable along with penalty under Section 78.
2. On a query, Revenue has not been able to give any evidence that the impugned demand on which the service tax of Rs.92,998/- was confirmed by the primary authority and set aside by the Commissioner (Appeals) was in relation to providing Real Estate Agents Service. Ld. DR fairly concedes that there is no evidence to that effect.
3. There is no representation on behalf of the respondent. Although on 3.6.2015 the case was adjourned to 10.7.2015 and the respondents representative Shri P.K. Mittal, ld. Advocate had noted the date. There is no request for any adjournment on behalf of the respondent either. However, in the memorandum of cross-objections the respondent has stated that it had deposited the service tax of Rs.1,01,979/- and there was no wilful misstatement/suppression of fact on its part and therefore the penalty under Section 75, 76 and 78 be dropped. It also stated that demand of Rs.92,998/- already set aside by the Commissioner (Appeals) should not be confirmed as the same was for providing construction of complex service which was not taxable during the relevant period.
4. We have considered the contentions of both sides. In this case, the Revenue is in appeal demanding service tax of Rs.92,998/- under Real Estate Agent Service. While the Revenues contention that the respondent have not been able to show that the amount for which the said service tax demand was dropped by Commissioner (Appeals) related to construction of residential complex, the fact remains that the Revenue has not been able to show that the said amount pertained to provision of Real Estate Agent service. It needs to be mentioned at this stage that the onus to establish that the amount pertained to Real Estate Agent service is on Revenue and that onus admittedly has not been discharged by Revenue. Therefore, Revenues appeal with regard to service tax demand of Rs.92,998/- is not sustainable. As regards, setting aside of penalty under Sections 76 and 77 because the penalty under Section 78 was imposed, it is settled law that during the relevant period the penalty under Section 76 and 78 were not mutually exclusive. However, Punjab & Haryana High Court in the case of CCE, Vs. First Flight Courier Ltd.- 2011 (22) S.T.R. 622 (P & H) and also in the case of CCE Vs. Pannu Property Dealers STA No. 13 of 2010 (decided on 12.7.2010) has in effect held that even if both these penalties were simultaneously imposable, once penalty under Section 78 was imposed, penalty under Section 76 need not be imposed. However, there is no two opinions about the imposability of penalty of Rs.1000/- under Section 77 even when Section 78 penalty is imposed. Regarding Revenues contention that the Commissioner (Appeals) did not have the right to reduce the penalty under Section 78 to 25% of the demand, we find that the primary adjudicating authority had not given the option of reduced mandatory penalty to the respondent and therefore as per the ratio of Gujarat High Court judgement in the case of Ratnamani Metals & Tubes Ltd. Vs. CCE 2013-TIOL-1124-HC-AHM-CX. the Commissioner (Appeals) was justified in granting that option but the Commissioner (Appeals) was required to put a condition that the said reduced penalty will have to be deposited within 30 days of the receipt of the order in appeal and by not putting that condition the Commissioner (Appeals) has certainly gone beyond the scope under Section 78 and therefore the reduction of mandatory penalty to 25% of demand without the condition of its deposit within 30 days is not sustainable. However as the option to pay reduced penalty in effect, has not been properly granted to the respondents following the ration of Gujarat High Court judgement in the case of Ratnamani Metals & Tubes (supra) it is to be granted by CESTAT.
5. In view of the foregoing, we make the following order:
(a) Revenues appeal seeking confirmation of demand of Rs. 92,988/- is not sustained.
(b) Revenues appeal with regard to imposition of penalty under Section 77 and equal mandatory penalty under Section 78 is upheld and the penalty is restored to Rs.1000/- under Section 77 and Rs.8,981/- under Section 78 of the Finance Act. However, penalty under Section 78 will be 25% of Rs.8,981/- if the same along with the demand of Rs.8,981/-and interest, if any leviable is paid within 30 days of the receipt of this order if any of these i.e. demand interest or penalty have not already been paid.
(R.K. Singh) Member (Technical) (Sulekha Beevi C.S.) Member (Judicial) RM 6