Custom, Excise & Service Tax Tribunal
M/S. Time Ads & Publicity vs Commissioner Of Central Excise, ... on 5 May, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20706 / 2014 Application(s) Involved: ST/COD/20246/2014, ST/Stay/20247/2014 in ST/20263/2014-DB Appeal(s) Involved: ST/20263/2014-DB, ST/28212/2013-DB [Arising out of (i) Order-in-Original No.COC-EXCUS-000-COM-067-13-14 dated 7/10/2013 passed by Commissioner of Central Excise and Service Tax, COCHIN.] M/s. Time Ads & Publicity Gate No. 22, Parammel House, Shenoy Road, Kaloor COCHIN - 682017 KERALA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Cochin-CCE C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, - 682018 KERALA Respondent(s)
Appearance:
Mr. George Joseph, CA G. Joseph & Associates Chartered Accountants 37/2038, First Floor, Muttathil Lane, Kadavanthra, Cochin - 682 020.
For the Appellant Mr.A.K. Nigam, Addl. Commissioner (AR) For the Respondent CORAM: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 05/05/2014 Date of Decision: 05/05/2014 Order Per : B.S.V.MURTHY
There is a delay of 6 days in filing the appeal and the learned CA submitted that the delay occurred because of a mistake on his part. We consider that the delay is required to be condoned and condone the same.
2. According to the learned CA, the entire demand of service tax has arisen in the case of the appellant because the department considered that service tax should be paid on the basis of income shown in the balance sheet which is prepared following accrual method. He submits that appellants paid entire amount of service tax duty with interest before issue of show-cause notice and therefore no show-cause notice should have been issued in this case at all. While he does not dispute the duty liability confirmed amounting to more than Rs.1.22 crores, it is his submission that since appellants have paid the entire amount with interest, no further action is called for.
3. It took considerable time to understand what exactly the facts are, analyze the same and apply the law. We find that in this case the appellants were paying service tax and till 2008-09 there was no problem. A portion of the amount which was not received in 2008-09 was received in the subsequent years and it is the submission of the learned CA that amount paid on this demand was appropriated towards 2008-09. In our opinion, this is wrong even though learned CA relied upon several decisions to submit that the payment of service is only after receipt of consideration, we do not consider it necessary to discuss all these issues since, in our opinion, it is obvious and it is a settled law that service tax is payable only after receipt of consideration. As regards the claim that the appellants had paid the entire amount before issue of show-cause notice, we find that suddenly the appellants stopped paying service tax to the Government in 2009-2010. When the Superintendent wrote a letter to them requiring them to furnish details, since they did not even file the returns, appellants gave the details and simultaneously paid the tax also with interest. In fact, full details of tax paid month-wise based on consideration received are not available anywhere in the records. Therefore it was difficult to determine how much of tax has been paid within due date and how much has been paid subsequent to the letter. However, prima facie, it emerged that taxes were paid with interest only when pointed out by the department. This is a case where the appellants were aware of their liability to service tax; were charging service tax to their customers. However, when it came to payment of the same to the Government, they did not think is necessary till a letter was written. If all the assessees take this stand and claim that no penalty should be imposed, the job of the Revenue authorities would be always to keep on writing letters to the assessee to pay tax and if the assessee pays the tax with interest, no further action need be taken. This is not contemplated under the law. Having collected the tax, appellant should have paid the tax to the Government. Having failed to do so, in our opinion, they cannot escape penalty. Nevertheless, the only difficulty which we face in taking the case entirely against the assessee is the observation of the Commissioner in Paragraph 21 which reads as In this regard, I find that the Annexure to SCN is based on the assessees balance sheet and the same is accounted as direct income for the respective years. When an assessee makes a claim that balance sheet is made on accrual basis and service tax demand cannot be on that basis, if the learned Commissioner makes an observation like this, it would prima facie go in favour of the assessee and it would also disable us from determining the correct duty liability. In this case with great reluctance, we have to remand the matter back to the original authority only because we do not have the details of month-wise receipts of service charges; tax payable; tax paid with interest and the duty of payment; tax and interest (separate figures).
4. In view of the discussion above, we do not consider it appropriate that matter should be remanded without any requirement of pre-deposit of penalty in view of the approach adopted by the appellants which in our opinion is totally against the letter and spirit of the law. When enquired about the financial position, learned CA submitted that he has no evidence about the financial difficulty.
5. Having regard to the facts and circumstances discussed above, we consider it appropriate that the matter has to be remanded in this case but to ensure that the appellants at least furnish the details correctly at the second stage of litigation, we require the appellant to deposit 25% of the penalty within eight weeks and report compliance to the Commissioner who after noting compliance with the requirement, shall proceed to adjudicate the matter afresh after giving reasonable opportunity to the appellants to present their case. It is made clear that if the appellants fail to deposit 25% of the penalty and report compliance before the Commissioner within eight weeks as ordered hereinabove, the department will be free to enforce the demand in accordance with the impugned order in original.
(Operative portion of the order has been pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER rv 3