Custom, Excise & Service Tax Tribunal
M/S. G.E.T. Engineering Constructions ... vs Cst, Chennai on 6 April, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.ST/165/2010
(Arising out of Order-in-Original No.25/2009 dated 28.07.2009, passed by the Commissioner of Service Tax, Chennai).
For approval and signature
Honble Shri R. PERIASAMI, Technical Member
M/s. G.E.T. Engineering Constructions Pvt.Ltd. : Appellant
Vs.
CST, Chennai : Respondent
Appearance Ms. Radhika Chandrasekar, Adv., for the appellant Ms. Cecilia Parthasarathi, AC (AR), for the respondent CORAM Honble Shri R. PERIASAMI, Technical Member Date of Hearing/Decision: 19.12.2014 FINAL ORDER No. 41048 / 2014 This is an appeal arising out of Order dated 28.07.2009 passed by the Commissioner of Service Tax, Chennai.
2. The brief facts of the case are that the appellants are engaged in the providing services of Erection, Commissioning and Installation and registered with Central Excise, Chennai. During the internal audit carried out on December,2007, it was noticed that they have not remitted the service tax on due dates for the period October,2006 to September,2007 and also not paid the interest on delayed payment for the said period. On pointing out, the appellants have paid the interest of Rs. 1,01,537/- on 20.12.2007. Show cause notice dated 16.04.2008 was issued to the appellants only for imposition of penalty under Section 76 of the Finance Act. The Commissioner of Service Tax in his impugned order imposed penalty of Rs.1,87,452/- under Section 76 of the Act. Hence the present appeal.
2. Ld. Advocate for the appellant submits that they have paid the service tax and interest before issue of show cause notice. As per Section 73 of the Finance Act, no penalty can be imposed on the appellants. It is not the case of non-payment of service tax, but it is the case of delayed payment of service tax. The period of delay during the period is only 3 days to 22 days and they have not collected the service tax from the customers. The delay is due to collection of data and compilation of service tax amount as they have taken Turnkey project on erection, commissioning and installation to various customers across the country. She pleaded for waiver of penalty under Section 80 of the Finance Act. She relied upon the following case laws:-
1. Shriram EPC Ltd. Vs. CST, Chennai 2014 (35) STR 564 (Tri.-Chen.)
2. CCE, LTU, Bang. Vs. Adecco Flexione Workforce Solutions Ltd.
2012 (26) STR 3 (Kar.)
3. Hyundai Motors (I) Ltd. Vs. CST 2008 (10) STR 281
4. CCE Vs. S.B. Packaging 2008 (9) STR 124 (P &H)
3. Ld. AR reiterated the findings of the adjudicating authority.
4. I have carefully considered the submissions of both sides. The limited issue in this appeal is against the penalty imposed under Section 76. There is no dispute on the facts that the appellants have paid service tax on the value of service rendered on monthly basis only during October, 2006 to September, 2007 there was a delay and as seen from the SCN, the number of days of delay are 8, 22,17, 17, 5, 9, 9, 5, 3, & 11 for each month. I find that the appellants are rendering Erection, Commissioning and Installation service to various customers under turnkey projects across India and to arrive monthly service tax liability they need to collect the data from all their sites. Therefore, the number of days of delay indicated above appears to be genuine and justified. As rightly pleaded by the appellants, this is not the case of default payment and the appellants remitted the interest amount on 20.12.2007 during the audit. The Honble High Courts and the Tribunal have held in number of decisions that benefit of Section 73 (3) to be extended and no penalty can be imposable. This Tribunal in the case of Shriram EPC Ltd. (supra) has allowed the appeal by relying the decision of the Honble High Court of Karnataka in the case of CCE, LTU, Bang. Vs. Adecco Flexione (supra). The relevant portion of the said order is reproduced as under:-
7.?I have considered submissions on both sides. It is obvious that the appellant paid entire tax liability and interest. This inference is drawn because the impugned order does not involve demands for these but just imposes penalty for delay in payment. When provisions similar to Section 73(3) was introduced in Central Excise Act, 1944 as Section 11A(2B) in the year 2001, it was clarified that these provisions are meant for encouraging immediate realization of short payments detected by audit teams so that whoever discharges the short paid tax immediately need not get entangled in protracted litigations. Therefore, unless there is a case of active suppression, provisions of Section 73(3) should be extended. This is view of the Karnataka High Court also in the case of CCE & ST, LTU, Bangalore v. ADECCO Flexione Work Force Solutions Ltd. - 2012 (26) S.T.R. 3 (Kar.). The decision in the case of First Flight Couriers was on a different footing because the appellant therein did not pay Service Tax and also did not file return on the ground that there was a strike by the employees of that appellant. It was not a case of bona fide error or doubt regarding legal provisions and prompt payment when short payment was pointed out by audit as is the case in this appeal.
8.?The facts of the present case are more similar to that in the case of ADECCO Flexione Work Force Solutions Ltd. (supra). So considering this decision of Hon. Karnataka High Court, I set aside the penalty imposed on the appellant. Thus the appeal is allowed.
Considering the facts of the present case is identical to the above and also considering the number of days of delay is few days, I hold that penalty imposed by the adjudicating authority under Section 76 is not sustainable. Accordingly, the impugned order imposing penalty under Section 76 of the Finance Act is set aside and the appeal is allowed.
(Operative part of the Order pronounced in the Open Court on 19.12.2014) (R. PERIASAMI) TECHNICAL MEMBER BB 1