Custom, Excise & Service Tax Tribunal
M/S Toyota Boshoku Automotive India ... vs The Commissioner Of Central Excise & ... on 23 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/22714/2014-SM [Arising out of Order-in-Appeal No. 43/2014 dated 22/04/2014 passed by Commissioner of Central Excise (Appeals), Bangalore] For approval and signature: HON'BLE SHRI S. S. GARG, JUDICIAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s Toyota Boshoku Automotive India Pvt. Ltd. Appellant(s) No. 41, Bhimenahalli, MN Hall P.O., Bidadi, Ramanagara Dist. 562109. Versus The Commissioner of Central Excise & Service Tax, LTU, Bangalore. Respondent(s)
Appearance:
Mr. N. Anand, Advocate For the Appellant Mr. Pakshi Rajan, A.R. For the Respondent Date of Hearing: 20/09/2016 Date of Decision: CORAM :
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER FINAL ORDER No. ../2016 The present appeal is directed against the Order-in-Appeal No. 43/2014 dated 22.04.2014 passed by the Commissioner (Appeals), vide which he has rejected the appeal of the appellant and upheld the Order-in-Original passed by the Deputy Commissioner of Central Excise & Service Tax, LTU, Bangalore.
2. The brief facts of the present case are that the appellant was engaged in the manufacture of seats, carpets and other parts and accessories of motor vehicles falling under Chapters 94, 87 and 57 of the First Schedule to the Central Excise Tariff Act, 1985. During the period of dispute the appellant received the services of erection, commissioning or installation service from foreign company viz. M/s Daiichi Jitsugyo Co. Ltd., Japan for installation of imported Injection Molding machine within the factory of the appellant. The appellant had discharged service tax under reverse charge mechanism in terms of Section 66A of the Finance Act, 1994 on the amounts actually paid or remitted to the above foreign company toward installation charges. However, due to communication gap between the Accounts Department and the Taxation Wing of the appellant, on account of oversight, the appellant omitted to consider an expenditure of Rs. 47,33,400/- for the financial year 2009-10 and Rs. 65,973/- for the financial year 2010-11 and hence did not consider the above value while making payment of service tax under Section 66A. During the course of audit by the Internal Audit Wing of the LTU Department, the above mistake came to the knowledge of the appellant. Immediately upon observation made by the Internal Audit Party of the LTU Department, the appellant paid the service tax along with interest on 7.8.2012 , 15.10.2012 and 09.11.2012. Thereafter, the appellant requested LTU Department not to impose penalty since mistake is genuine but despite the request of the appellant, the Department issued a show-cause notice seeking to impose mandatory penalty on the ground of suppression. The adjudicating authority passed the Order-in-Original dated 01.11.2013 and imposed mandatory penalty of Rs. 4,94,335/- under Section 78 of the Act. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals) who also upheld the imposition of mandatory penalty under Section 78 of the Act. Aggrieved by the impugned order, the appellant has filed the present appeal.
3. Heard both the parties and perused the records.
4. The learned counsel for the appellant submitted that imposition of penalty under Section 78 of the Finance Act is contravention to the provisions of Section 73(3) of the Finance Act, 1994. He further submitted that service tax along with interest has already been paid by the appellant before issuance of show-cause notice. He also submitted that Section 73(3) of the Finance Act, in unambiguous terms states that when an assessee has paid service tax either on his own or on the basis of the officers ascertainment and informs the officer of such payment, then the said Section does not give any power to such officer to issue a show-cause notice in respect of the tax so paid and such issuance of show-cause notice is sans force of law and accordingly, not sustainable and tenable. In support of this submission, he relied upon the following case laws :
(i) CCE vs. Adecco Felxione Workforce Solutions Ltd. [2012 (26) STR 3 (Kar.)
(ii) Jas Telecom Pvt. Ltd. vs C.C.E. [2015 (326) E.L.T. 750 (Tri.- Bang.)]
(iii) Shriram EPC Ltd. vs. C.S.T. [2014 (35) S.T.R. 564 (Tri.-Chennai)
(iv) Gujarat Ambuja Exports Ltd. Vs. CCE [2014 (34) STR 445 (Tri.-Ahmd.)]
(v) Gujarat Borosil Ltd. vs. C.C.E. [2014 (36) STR 808 (Tri.-Ahmd.)]
(vi) C.C.E. vs. Murli Industries Ltd. [2015 (39) S.T.R. 1033 (Tri.-Mum.)
(vii) Solar Industries India Ltd. vs. CCE [2016 (42) STR 411 (Tri.Mum.)
(ix) C.C.E. vs. Ranjit Builders [2015-TIOL-793-CESTAT-
MUM]
(x) Continental Foundation Jt. Venture vs. CCE [2007 (216) E.L.T. 177 (S.C.)]
(xi) Tamil Nadu Housing Board vs. C.C.E. [1994 (74) E.L.T. 9 (S.C.)]
6. On the other hand, learned A.R. submitted that the appellant has suppressed the fact of receiving the services of erection, commissioning & installation from an overseas entity from the eyes of the department with an intention to evade the payment of service tax and they failed to include the same in the ST3 returns filed by them regularly for the respective period. Therefore, the lower authority has rightly imposed the penalty under Section 78 of the Finance Act, 1994.
7. After considering the submissions by both the parties and perusal of the provisions of Sections 73 & 78 of the Finance Act, 1994 and the judgements relied upon by the appellant cited supra, I find that Section 73(3) is very clear as it says that if tax is paid along with interest before issuance of the show-cause notice, then in that case, show-cause notice shall not be issued. In this case, I find that the contention of the appellant that he bonafide believed that he is not liable to pay service tax but during the audit, the audit party informed him that he is liable to pay service tax, then he immediately paid the entire service tax along with interest. Except mere allegation of suppression, the Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of tax. Consequently, in my opinion, the imposition of penalty under Section 78 of the Act is not justified and bad in law. In view of the above discussion, I set aside the impugned order by allowing the appeal of the appellant.
(Pronounced in the open court on ..) (S. S. GARG) JUDICIAL MEMBER /vc/