Custom, Excise & Service Tax Tribunal
Ashok Sitaldas Punshi & Associates vs Cce Nasik on 29 September, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. ST/06/09 - Mum
(Arising out of Order-in-Appeal No. IPL/242/NSK/2008 dated 24.12.08 passed by the Commissioner of Central Excise & Customs (Appeals), Nasik)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
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 :
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?
Ashok Sitaldas Punshi & Associates
:
Appellants
Versus
CCE Nasik
Respondents
Appearance Shri Pradeep Korde, Consultant for Appellants Shri N.A. Sayyad, JDR for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 29.09.10 Date of Decision : 29.09.10 ORDER NO.
Per : Ashok Jindal The appellant has filed this appeal against the imposition of penalty under Section 76 and 77 of the Finance Act, 1994.
2. The facts of the case are that the appellant is a practicing Civil Engineer (registered as Architect) since 2005 and was paying service tax and filing Tax Returns regularly, till 31.03.2007. Thereafter, for the year 2007-08 he did not file ST Return and not paid service tax in time. On 12th May 2008 the appellant filed Service Tax Return along with payment of service tax for the Financial Year Ending 31st March 2008. A show-cause notice was issued to the appellant on 5th June 2008 proposing penalty under Section 76 and 77 of the Finance Act. The lower authorities have confirmed the penalties and also imposed late fee under Section 70 of the Finance Act. Aggrieved by the order of imposition of penalty, the appellant is in appeal.
3. The learned Advocate for the appellant submitted that in this case the benefit of Section 80 of the Finance Act, 1994 is to be given to the appellant in the facts and circumstance of the case as the appellant being an Architect was providing the service to his clients and charging service tax from them. He has to pay service tax from the charges received from their clients during the year. Moreover, as the appellant was not having an Accountant during the period to calculate appropriate service tax amount payable, he could not pay the service tax and could not file the Return in time. On realising the mistake, he paid the service tax and filed the ST Return voluntarily to the department. The only reason is that the appellant was not able to account his transaction of services provided to his clients, hence the penalty under Section 76 is to be waived. In support of his contention he placed reliance on Maraketforce (Chennai) Pvt. Ltd. vs. Commissioner of Service Tax 2007 (8) STR 175 (Tri. Che) wherein it was held that late payment not due to mala fide intention, penalty under Section 76 of the Finance Act, 1994 is not leviable. Further, he submitted that the appellant has paid the service tax before the issue of show-cause notice along with interest.
4. On the other hand the learned DR submitted that there is a delay of 500 days in payment of service tax and in filing of ST return, the lower authorities has rightly imposed the penalty under Section 76 on the appellant. He further submitted that in the case of B.L. Mantri & Associates (P) Ltd. vs. CCE Jaipur 2006 (3) STR 781 (Tri. Del) wherein it was held that no sufficient staff to calculate the service tax is not a ground for reduction in penalty. He further submitted that in the case of Asst. Commissioner of Central Excise vs. Krishna Poduval 2006 (1) S.T.R. 185 (Ker.) the Honble High Court of Kerala has held that provisions of Section 76 and 78 of the Finance Act, 1994 are two distinct sections and separate penalty can be imposed under both the sections of the Finance Act. He also submitted that in this case the appellant has failed to give reasonable cause for waiver of penalty under Section 80. Hence, the impugned order is to be sustained.
5. Heard both sides.
6. I have gone through the submissions made by both the sides and find that in this case the appellant is a practicing Civil Engineer and providing service to various clients and receiving a gross amount from their clients. It is also on record that the appellant is registered with the service tax department from the year 2005 and paying Service Tax Returns under the category of Architect Service in time. Only during the year 2007-08 the appellant could not file the service tax return in time along with service tax due to the reasons that he was not having any accountant to calculate the appropriate service tax payable but it is also on record that the appellant himself has calculated and paid the service tax liability and filed the service tax return voluntarily, although late. In this circumstance, the benefit of Section 80 of the Finance Act, 1994 has to be given to the appellant as held by this Tribunal in the case of Varsana Ispat Ltd. vs. CCE Rajkot 2010 (19) S.T.R. 359 (Tri. Ahmd.). The case law cited by the learned DR are not relevant to the facts and circumstances of the case as in the case of B.L. Mantri & Associates (P) Ltd. (supra) the assessee was a Private Ltd. Company and he might be having sufficient staff to calculate the tax. Moreover, in that case the service tax liability was clearly spelt out in the invoice raised by the assessee. Hence, the facts of the case are not similar to the case before me. In this circumstance, benefit of Section 80 of the Finance Act, is to be given to the appellant and penalty under Section 76 of the Finance Act, 1994 is waived. With this term the appeal is disposed of.
(Pronounced in Court) (Ashok Jindal) Member (Judicial) nsk 5