Custom, Excise & Service Tax Tribunal
Yash Corporation vs Service Tax - Ahmedabad on 29 March, 2023
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Service Tax Appeal No. 10717 of 2021- SM
(Arising out of OIA-AHM-EXCUS-003-APP-12-2021-22 dated 28/05/2021 passed by
Commissioner of Central Excise, Customs and Service Tax-AHMEDABAD-III)
YASH CORPORATION ........Appellant
B-2 Balkrishna Shopping Centree, St Workshop Road Mehsana Industrial Estate Mehsana
Mehsana
Mehsana, Gujarat
VERSUS
C.S.T.-SERVICE TAX - AHMEDABAD ...Respondent
7 th Floor, Central Excise Bhawan, Nr. Polytechnic
Central Excise Bhavan, Ambawadi,
Ahmedabad, Gujarat - 380015
APPEARANCE:
Ms. Trishal Sheth, Advocate appeared for the Appellant
Shri Prakash Kumar Singh, Superintendent (AR) for the Respondent
CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR
Final Order No. A/ 10744 /2023
DATE OF HEARING: 08.02.2023
DATE OF DECISION: 29.03.2023
RAMESH NAIR
This appeal is directed against Order-In-Appeal passed by Learned
Commissioner (Appeals) whereby a penalty of Rs. 10,300/- imposed under
Section 70 of Finance Act, 1994 read with Rule 7 of the Service Tax Rules,
1944 has been upheld for late filing of ST-3 return.
2. Ms. Trishla Sheth, Learned Counsel appearing on behalf of the
Appellant submits that the show cause notice is not maintainable for the
reason that the same was not issued under Section 174 (2) of the CGST
Act, 2017 wherein the saving clause is provided. Therefore, on this ground
itself the show cause notice issued during the GST regime is without
jurisdiction. She further submits that the penalty was imposed under Section
70 but there is no provision to recover the amount of penalty under Section
70 for this reason also the demand of penalty is not sustainable.
2|Page ST/10717/2021-SM
3. Shri Prakash Kumar Singh, Learned Superintendent (AR) appearing on
behalf of the Revenue reiterates the finding of the impugned order.
4. On careful consideration made by both sides and perusal of record, I
find that the limited issue to be decided that whether the penalty
imposed by the lower authority of Rs. 10,300 under Section 70 of Finance
Act, 1994 read with Rule 7 of the Service Tax Rules, 1944 is correct and
legal or otherwise. I find that there is no dispute that the appellant have
filed the ST- 3 return belatedly. For late filing of ST- 3 return the late fee
is provided under section 70 which is reproduced below:-
"Section 70(1) of the Finance Act, 1994 states that if an
assessee files his or her half-yearly service tax return following
the expiry of the specified deadline, then the assessee in
question will be liable to pay additional fees based on the
duration of delay. These charges could rise to Rs 20,000."
In terms of the above subsection (1) of Section 70 if there is delay in filing
the ST-2 returns, the appellant has to pay the late fee which is not
exceeding Rs. 20,000. In view of this explicit provision which is mandatory
and no discretion to waive the penalty is provided under the statute. The
appellant is liable for late fee. However, the amount of late fee is limited to
maximum of 20,000/-. Both the lower authorities have demanded 10,300 as
penalty. In my considered view, in view of the facts of the case the appellant
deserve for leniency, accordingly, the penalty of Rs. 10,300 is reduced to Rs.
3000.
4.1 As regard the submission of the Learned counsel that show cause
notice was not issued under Section 174 therefore, the same is not
maintainable. This submission is not tenable in the face of the show cause
notice. The show cause notice in Para 4 clearly invoke section 174 (2) which
is reproduced below:-
"4. ................
The provisions of the repealed Central Act, 1994 have been
saved vide Section 174(2) of the CGST Act, 2017 and therefore
the provisions of the said repealed/amended Acts and Rules
made thereunder are enforced for the purpose of demand of
duty, interest, etc, and Imposition of penalty under this notice.
.........................
3|Page ST/10717/2021-SM 4.1 In view of the above paragraph it is clear that the show cause
notice was very much issued invoking section 174 (2) of CGST Act, 2017 under which saving clause is provided for any proceeding under the Finance Act, 1944. Therefore, the submission is apparently incorrect. Accordingly, the same is not sustainable
5. As per my above observation, the appeal is partly allowed in the above terms.
(Pronounced in the open court on ) RAMESH NAIR MEMBER (JUDICIAL) Geeta