Custom, Excise & Service Tax Tribunal
M/S Shree Anand Venkateshwara ... vs Cce, Pune-I on 25 February, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. ST/87440/15-Mum (Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-0083-15-16 dated 28.09.2015 passed by the Commissioner of Central Excise (Appeals), Pune-I). For approval and signature: Honble Shri Ramesh Nair, 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 :Yes 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?
========================================================
M/s Shree Anand Venkateshwara Associates
: Appellant
Versus
CCE, Pune-I
: Respondent
Appearance
Shri Suhas P. Bora, C.A.
: For Appellant
Shri V.K. Kaushik, Assistant Commr. (A.R.)
: For Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of Hearing :
25.02.2016
Date of Decision:
.06.2016
ORDER No. .
Per: Ramesh Nair
The appeal is directed against of Order-in-Appeal No. PUN-EXCUS-001-APP-0083-15-16 dated 28.09.2015 passed by the Commissioner of Central Excise (Appeals), Pune-I, whereby the learned Commissioner (Appeals) did not interfere in the Order-in-Original No. P-I/ADC/ST Adj/19/2014 dated 19.03.2014 and dismissed the appeal filed by the appellant. The appeal before the Commissioner (Appeals) by the appellant was only for the limited relief of waiver of penalty imposed under Section 77 & 78 of the Finance Act, 1994.
2. The fact of the case is that the appellant were providing the services of Construction of Residential Complex Services for various customers. The said service is taxable w.e.f. 01.07.2010, it was observed that although the appellant was registered themselves for the said services on 13.08.2011 but they have not discharged the Service Tax liability. The appellant have been providing the Construction of Residential Complex Service since February, 2011 onwards. During the enquiry, on pointing by the Department that an amount of Service Tax of Rs. 42,80,104/- for the period February, 2011 to March, 2012 on Construction of Residential Complex Services and Service Tax of Rs. 1,14,428/- towards Goods Transport Agency services has not been paid by the appellant. They have worked out the Service Tax liability, obtain the Service Tax registration and paid the entire Service Tax along with interest of Rs. 1,16,772/- + Rs. 6,045/-. In the adjudication order the demand of Rs. 42,80,104/- towards Construction of Residential Complex Services and Rs. 28,254 towards Goods Transport Agency services was confirmed and the amount was already paid by the appellant has been appropriated against such demand. In addition, equal amount of penalty of Rs. 43,08,358/- was imposed under Section 78 and penalty of Rs. 10,000/- under Section 77(1)(a) was also imposed. The adjudicating authority also gave the option to the appellant for reduction of penalty to 25% under first proviso to Section 78 of the Finance Act, 1994, if the reduced amount of penalty is paid within 30 days of the date of communication of adjudication order. The appellant, aggrieved by the portion of the imposition of penalties, filed an appeal before the Commissioner (Appeals) which was rejected, therefore the appellant is before me.
3. Shri Suhas P. Bora, learned Chartered Accountant appearing on behalf of the appellant submits that the appellant is not contesting the tax liability as determined by the adjudicating authority. They are only contesting the imposition of penalties made under Section 77 & 78. He submits that as regard the taxability on Construction of Residential Complex Services there were confusion and doubts as evident that on the same issue the Apex Body of the builders i.e. Maharashtra Chamber of Housing and Industry has filed writ petition before Hon'ble High Court of Bombay. Therefore the legal position of taxability in respect of Construction of Residential Complex Services was not clear, accordingly, most of the builders have not been discharging the Service Tax. He submits that since there was confusion that whether they are liable to pay their Service Tax, the appellant was not charging and collecting the Service Tax from the service recipient. He submits that the appellant have not hidden any fact that the correct and true data regarding transaction in respect of their business were disclosed in the books of account, as the data of taxable value was obtained by the department also from the same books of account. He submits that on pointing out by the Department that the activity carried out by the Appellant is liable to Service Tax, the appellant paid the entire Service Tax along with interest even before the issuance of show-cause notice. As per the above undisputed fact, the appellant have made out a clear case for waiver of penalty in terms of Section 80 of Finance Act, 1994. He further submits that since the Service Tax along with interest has been paid before issuance of show-cause notice without any protest, no show-cause notice sould have been issued by the Revenue in terms of Section 73(3) of Finance Act, 1994, for this reason also no penalty is imposable. In support of his submission the appellant placed reliance on the following judgments:-
(i) Shapoorji Pallonji & Company Ltd. Vs. Commissioner of Service Tax [CESTAT, Bangalore Final order No. 964/2010 dated 04.06.2010]
(ii) ARC Hemant S Dugad Vs. CCE [(2008) 17 STT 31 (Mum-CESTAT SMB)
(iii) Padmini Products Vs. CCE, [1989 (43) ELT 195 (SC)]
4. On the other hand Shri V.K. Kaushik, learned Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that there was no doubt about the taxability of services provided by the appellant. Even though the matter was litigated in the court of law, this Act of the appellant or their association does not alter the unambiguous legal position of taxability on the services of Construction of Residential Complex Services. It is fact that the appellant have not discharged the Service Tax in time and the same was paid only after intervention of the Department, therefore the lower authorities have correctly imposed and upheld the penalties under Section 77 & 78 of the Finance Act, 1994 which do not require any interference.
6. I have carefully considered the submissions made by both the sides.
7. I find that it is a fact that though there was clear provision of Service Tax liability on the Construction of Residential Complex Services but the Chamber of the Apex Body i.e. Maharashtra Chamber of Housing and Industry litigated the matter in the court of law. Therefore there was an uncertainty in the minds of the builders, whether during the pendency of the litigation, tax has to be paid. Moreover in the present case the appellant, immediately, on pointing out by the Department, discharged the entire Service Tax liability along with interest. In my view, in such a situation the appellant case is covered by Section 73(3) of the Finance Act, 1994 which reproduced below:-
Section 73(3) of the Finance Act, 1994 (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the [Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid :
Provided that the [Central Excise Officer] may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the [Central Excise Officer] shall proceed to recover such amount in the manner specified in this section, and the period of [thirty months] referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. From the above provision it is clear, if the assesse pays the Service Tax along with interest, no show-cause notice should be issue. Therefore when show-cause notice itself is not warranted, no adjudication is also required and therefore there is no question of imposition of any penalty. Taking into consideration the conduct of the appellant regarding immediate payment of Service Tax along with interest as well as the circumstances that the matter was under litigation in the court of law, the appellant has been able to show the reasonable cause for non-payment of Service Tax in time. It is also noted that the appellant did not try to hide anything, as the data of taxable value was correctly declared by the appellant in the books of account. Taking consideration of these factors, I am of the view that the appellant has made out the strong case for waiver of the penalties imposed under Section 77 & 78 invoking Section 73(3) as well as Section 80 of the Finance Act, 1994. I therefore set aside the impugned order and allow the appeal.
(Pronounced in Court on 06.2016)
Ramesh Nair
Member (Judicial)
Sp/
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APPEAL NO. ST/87440/15-Mum