Custom, Excise & Service Tax Tribunal
M/S. Mani Engineering Works vs Cce, Salem on 5 September, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
S/112/2008
(Arising out of Order-in-Revision Sl.No. 01/2008 (Commr) dated 27.02.2008, passed by the Commissioner of Central Excise, Salem)
For approval and signature
Honble P.KARTHIKEYAN, Member (Technical).
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1. Whether Press Reporters may be allowed to see the :
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CESTAT (Procedure)Rules, 1982?
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CESTAT (Procedure)Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _______________________________________________
M/s. Mani Engineering Works : Appellant
Vs.
CCE, Salem : Respondent
Appearance Shri J.R. Srinivasan, Consultant, for the appellant Shri V.V. Hariharan, JCDR, for the respondent CORAM Shri P. KARTHIKEYAN, Member (Technical) Date of hearing : 05.09.08 Date of decision : 05.09.08 Final ORDER No.________/2008 In the impugned order the applicant M/s. Mani Engineering Works has sought waiver of predeposit and stay of recovery of penalty imposed on it under Section 76 of the Finance Act, 1994 (the Act), by the Commissioner in an order passed in revision in terms of Section 84 of the Act. After hearing both sides on the stay application, the appeal itself is taken up for disposal.
2. The facts of the case are that the appellants were found to have rendered the service of site formation and clearance, excavation, earth moving and demolishing classified under the category of site preparation and clearance service with effect from 16.06.05. The period of dispute in the instant case is financial years 05-06 and 06-07. After due process of law, the original authority demanded the tax due, appropriate interest and imposed penalties under Secitons 77 & 78 of the Act. In revision proceedings, the Commissioner imposed penalty in terms of Section 76 of the Act.
3. Moving the application, the Ld. Consultant for the appellants submits that the activity alleged to have been under taken by the appellants did not constitute service of site preparation and clearance. The appellants had only rented out cranes for use by L & T on hire basis. This was not a taxable activity. They had challenged the tax demanded and the penalty imposed by the original authority before the Commissioner (Appeals). The appeal was pending. It is submitted that once a penalty was imposed under Section 78 and imposing penalty also under Section 76 of the Act was not justifiable.
4. The Ld. JCDR submits that there is no infirmity in the revisional order. However, he submits that in terms of sub-section 4 of Section 84, the impugned order could not have been validly passed owing to the pendencey of their appeal against the order of the original authority before the Commissioner (A).
5. After considering the submissions made, I note that, as rightly pointed out by the Ld. JCDR, the revisional order has been passed prematurely. Sub section 4 of Section 84 of the Act reads as follows:
4)?No order under this section shall be passed by the Collector of Central Excise in respect of any issue if an appeal against such issue is pending before the Collector of Central Excise (Appeals). It is found from the appeal filed by M/s. Mani Engineering Works, that they have challenged the service tax demanded, consequent to which the impugned penal liability had been fastened on them. Tax liability on the activity undertaken by the appellants being under challenge before the Commissioner (A), penalty under Section 76 of the Act could not have been validly imposed on the appellants in a revisional order finding that the appellant had failed to follow the statutory provisions while rendering an activity liable to service tax. Accordingly, the impugned order is set aside and the matter remanded to the Commissioner of Central Excise to take up the adjudication of the issue at the appropriate time as per law.
(Dictated and pronounced in open Court) (P.KARTHIKEYAN) MEMBER (T) BB ??
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