Custom, Excise & Service Tax Tribunal
M/S. Hathway Cable Entertainment (P) ... vs Commissioner Of Service Tax-Iii on 7 October, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-,,,,,SM Date of Hearing/Decision:07.10.2010 Service Tax Appeal No.ST/240/10-SM [Arising out of Order-in-Appeal No.398/MA/GGN/2009 dated 7.12.2009 passed by the Commissioner of Central Excise (Appeals), Delhi-III]. M/s. Hathway Cable Entertainment (P) Ltd. Appellant Vs. Commissioner of Service Tax-III Respondent
Present for the Appellant :Shri.M.K.Gandhi, Advocate Present for the Respondent:Shri.Anil Khanna, SDR Coram: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER ORDER NO. _______________ DATED:07.10.2010 PER: D.N.PANDA The dispute arose when the appellants sought registration belatedly to discharge its obligation under Finance Act, 1997. There was an allegation that the appellant collected a sum of Rs.8915270/- towards output services rendered by them which included service tax of Rs.952147/- for the months of April, 2008 to June, 2008. A show cause notice dated 26.9.2008 was issued bringing out the fact that the appellant was registered with the Service Tax Authorities on 23.5.08 but did not discharge Service Tax Liability. Nor there was return filed by the due dates. Holding that the appellant has suppressed the facts and figures, the show cause notice was issued for levy of Service Tax of Rs.769214/-, Education Cess of Rs.15384/- and S & H Education Cess of Rs.7,692/-. So also the show cause notice was for levy of interest of the appropriate amount on the defaulted tax and penalty under section 78 as well as section 77 of the Finance Act 1994.
2. The appellant lost its case before both the authorities below. Ld. Counsel appearing on behalf of the appellant submits that there was no wilful breach of law made by the appellant and the appellant being a newcomer of business, there was a delay in depositing the tax as well as seeking registration. Therefore, levy of penalty under both the sections shall be harsh, when the appellant came forward to deposit the Service Tax.
3. Ld. DR on the other hand, supports the order of the authority below.
4. It is surprising to note from the orders of the authority below that they did not examine any of the evidence the appellant produced, when the show cause notice alleged that there was collection of Service Tax by the appellant, while receiving the consideration for the service provided as stated in the aforesaid paragraph. There cannot be levy of penalty automatically without coming to the conclusion that the appellant realized tax and did not deposit the same to the treasury with intent to evade the tax, there cannot be automatic levy of penalty. Merely disclosing the provision of law, the levy enforced by the authorities shall not serve the object of the statute.
5. In view of the aforesaid observation the matter is remanded to the ld. Adjudicating Authority to examine the issue threadbare with the material facts and evidence on record, as to whether the ingredients of Section 78 exist to impose penalty. Granting fair opportunity of hearing to the appellant the authority shall examine entire allegation in the show cause notice and pass a reasoned and speaking order. Thus, setting aside orders of both authorities below, the matter is remanded to the ld. Adjudicating Authority to pass a reasoned and speaking order.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita