Custom, Excise & Service Tax Tribunal
Bharat Matrimony. Com. Pvt. Ltd vs Commissioner Of Central Excise & St on 30 May, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
CHENNAI
Appeal No.ST/25/2006 & ST/180/2006
[Arising out of Order-in-Appeal No.53/2005 (M-ST) dt. 6.12.2005 and Order-in-Original No.10/2006 dt. 2.5.2006 passed by the Commissioner of Central Excise (Appeals) Chennai and CCE Chennai respectively]
For approval and signature :
Honble Shri P.K. Das, Judicial Member
Honble Shri Mathew John, Technical Member
1. Whether Press Reporters may be allowed to see 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 the Members wish to see the fair copy of the order ? :
4. Whether Order is to be circulated to the Departmental authorities ? :
Bharat Matrimony. com. Pvt. Ltd. Appellant
Versus
Commissioner of Central Excise & ST
Chennai Respondent
Appearance:
Shri S. Muthuvenkatraman, Advocate For the Appellant
Shri Parmod Kumar, JC (AR) For the Respondent
CORAM :
Honble Shri P.K. Das, Judicial Member
Honble Shri Mathew John, Technical Member
Date of Hearing : 30.5.2013
Date of Decision : 30.5.2013
FINAL ORDER No.___________
Per P.K. Das
By Final Order No.669/06 dt. 31.7.2006 and No.135/07 dt. 15.2.07, the Tribunal dismissed Appeal Nos.ST/25/2006 and No.ST/180/06 for non-compliance of the stay order dt. 23.6.06 & 9.1.2007 respectively. Against the above final orders of the Tribunal, the appellants moved before the Honble Madras High Court in W.P No.25195 of 2006 M.P. No.1 of 2006 and W.P.No.10316/2007 M.P.No.1 of 2007 and the Honble High Court by its separate orders both dt. 29.10.2012 directed the appellant to comply with the stay orders dt. 23.6.2006 and 9.1.2007 in the respective appeals within 4 weeks from the date of receipt of the copy of the order. On compliance of the stay orders, the Tribunal was directed to take up the appeals and dispose of the same on merits in accordance with law. The learned advocate submits that they have complied with stay orders dt. 23.6.06 and 9.1.2007 of the Tribunal and submitted compliance report dated 19.12.12, which is kept on record. In view of that, both the appeals are taken up for hearing for disposal.
2. The relevant facts of the case, in brief, are that the appellants are engaged in the business of providing matrimonial service through their portals/web sites. By show cause notice dt. 7.7.04, service tax was demanded for the period from Oct 01 to May 04 of Rs.60,72,781/- classifying the service under the category of online information and database access and or retrieval service. The original authority confirmed the demand of tax along with interest and imposed penalties under Section 75A, 76, 77 and 78 of the Finance Act, 1994. The Commissioner (Appeals) extended cum tax benefit and modified the demand to the tune of Rs.56,57,756/- and set aside penalties except Section 75A penalty for non-registration. Aggrieved by the order of Commissioner (Appeals), the appellants filed appeal No.ST/25/2006.
2.1 Subsequently, another SCN dt. 24.6.06 was issued proposing to demand of tax of Rs.74,31,412/- for the period from June 04 to March 05 along with interest and penalties under Section 76, 77 & 78 of the Act. The Commissioner of Central Excise, Chennai confirmed demand of entire amount of tax along with interest and imposed penalty under Section 76 of the Act. Against that order, appellant filed Appeal ST/180/06 before Tribunal.
3. The learned advocate submits that Commissioner (Appeals) had set aside penalties and had given detailed finding on this issue. He drew the attention of the Bench to relevant portion of the order of Commissioner (Appeals). He submits that after this period, they have started paying tax regularly. It is submitted that penalty under Section 76 imposed by the learned Commissioner may be set aside. He has not contested the demand of tax seriously on merit.
4. Ld.AR for Revenue reiterates the findings of the Commissioner.
It is submitted that applicant despite having knowledge of levy of tax, they have not paid the same and therefore Commissioner rightly imposed penalty under Section 76 which is liable to be upheld.
5. After hearing both sides, and on perusal of the records, we find that the Ld. Advocate on behalf of the appellant mainly restricted his submission on imposition of penalty under Section 76 in Appeal No.ST/180/06. He drew the attention of the Bench to the relevant portion of the order of the Commissioner (Appals) in other appeal as under :-
In the present case, the issue involved is purely that of interpretation of the legal provisions. It is also amply clear from the contents levelled in the notice that the present case is not covered by any precedence and the Boards clarification dated 9.7.2001 refers to dotcom companies like Taxindiaonline.com who charge the customer for certain specific information contained in their website in advance or credit basis and invariably such retrieval/access to information used for commercial purpose etc. In the present case, the information retrieved/accessed is for the purpose of finding a suitable partner to enter into a matrimonial alliance unlike the examples given in the circular (supra).
Considering the notable amendment to section 78 and the fact that Service tax is new legislation and debated only of late, there is no room for suppression or intent to evade payment of service tax. It must also be kept in mind that dot.coms of the genre of Bharat Matrimony are new start ups providing a unique service to persons seeking matrimonial alliances, utilizing the reach of the World Wide Web. Marriages, it is said, are made in heaven, but surely, a web based matrimony service makes that task a little more easier, with a wider choice that criss-crosses across international boundaries, at the same time assuring security of information and unobtrusive usage. As discussed hereinabove, there is no doubt that the service will fall in the ambit of service tax levy. At the same time, it is reasonable to expect that the appellants, who made their foray with these services only in October 2001, would, at least in the initial years, concentrate their efforts into making their entrepreneurship a success. This being so, any such omission to suo moto come forward and discharge their service tax liability could very well have been due to ignorance of the liability or bonafide confusion concerting the taxing provisions or a combination of both but certainly not with intent, by suppression or concealment. This benefit of doubt must be extended to the appellant. It is also not the case that the appellants collected tax from their customers and retained the same by not passing it on to the exchequer. I am also convinced that reasonable cause for the failure on the part of the assessee in discharging their duty liability, and as such this is a fit case for invocation of the provisions of Section 80 of the Act and revoke the penalties imposed.
6. On the other hand, in appeal No.ST/180/06, the Commissioner has merely observed that the appellant failed to pay service tax in accordance with the provision of Finance Act, 1944, and a penalty under Section 76 is liable to be imposed. But, in other appeal, Commissioner (Appeals) had discussed in detail for invoking Section 80 of the Act, as mentioned above. We find that finding of the Commissioner (Appeals) is proper and reasonable. We also notice that after this proceedings, the appellants have been paying service tax regularly as stated by the learned advocate. In view of that, the penalty imposed under Section 76 in Appeal ST/180/06 is not sustainable. Regarding demand of tax, we agree with the findings of both the authorities and the learned advocate has also not made any serious objection and therefore, there is no need for further discussion.
7. In view of the above discussion, we do not find any reason to interfere with the order of Commissioner (Appeals), which is upheld and Appeal No.ST/25/2006 is dismissed. In Appeal No.ST/180/2006, impugned order is modified in so far as penalty imposed under Section 76 is set aside.
(Dictated and pronounced in open court)
(MATHEW JOHN) (P.K.DAS)
TECHNICAL MEMBER JUDICIAL MEMBER
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