Custom, Excise & Service Tax Tribunal
Micro Print And Pack vs Principal Commissioner Of Service Tax ... on 27 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/20168/2017-SM [Arising out of Order-in-Appeal No. 1662-2016 dated 21/11/2016 passed by Commissioner of Service Tax , Bangalore Service Tax(Appeals) ] Micro Print And Pack No 27/2-27/4c Bommsandra Jigani Link Road Yaradanahalli Bommasandra Industrial Area BANGLORE - 560035 KARNATAKA Appellant(s) Versus PRINCIPAL COMMISSIONER OF SERVICE TAX Bangalore Service Tax-ii 4TH FLOOR, T.T.M.C. -B.M.T.C. BUS STAND BUILDING, OLD AIRPORT ROAD BENGALURU - 560071 KARNATAKA Respondent(s)
Appearance:
H.Y. RAJU ADV NO. 77, 1ST FLOOR, ABOVE KBN TRADERS, BTS MAIN ROAD, WILSON GARDEN EXTENTION, BANGALORE - 56030 KARNATAKA For the Appellant Shri HY Raju, Adv.
For the Appellant Shri Navin Kushalappa, AR For the Respondent Date of Hearing: 27/10/2017 Date of Decision: 27/10/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22650 / 2017 Per : S.S. GARG The present appeal is directed against the impugned order dated 21.11.2016 passed by the Commissioner (A) whereby the Commissioner (A) upheld the order-in-original and rejected the appeal of the appellant.
2. Briefly the facts of the case are that the appellant is registered for providing taxable services under the category of transportation of goods by road service. The limited issue involved in this appeal is only against the imposition of penalty of Rs. 1,80,000/- under section 70 of Finance Act, 1994 read with Rule 73 of Service Tax Rule 2004on the appellant in their failure in filing the service tax return in time for the period 2006-07 to 2011-12. The penalty has been confirmed vide order-in-original by imposing the amended provisions under section 70 Finance Act, 1994 as per which the penalty has been worked out at the rate of Rs. 20,000/- per return and for 9 returns during the said period the same has been computed as Rs. 1,80,000/-.
3. Heard both the parties and perused the records.
4. Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed contrary to the provisions of the act and also contrary to the binding judicial precedent on the same issue. He further submitted that the appellant are not disputing the delay in filing the service tax returns for the period October 2006 to March 2011 but the original authority has imposed the penalty under a non-existent provision for the period during which the default was committed by the appellant. He further submitted that the provisions of Section 70 of Finance Act, 1994 prescribing a maximum of late fee of Rs. 20,000/- per return is effective only from 08.04.2011. He further submitted the original authority as well as appellate authority have wrongly applied the amended provisions of Section 70 of the Finance Act, 1994 read with Rule 7C of Service Tax Rule 1994 effective from 08.04.2011 for imposing a total penalty of Rs. 1,80,000/-. He further submitted that prior to the amendment of Section 70, the provisions of this section provided for payment of maximum late fee of Rs. 2,000/- subject to the provisions of Rule 7C of Service Tax Rules 1994. He also submitted that the amendment of Section 70 enhancing the penalty or increasing the penalty is only prospective and not retrospective. Therefore, imposing the penalty under the amended provisions is not sustainable in law. In support of his submission, he relied upon the decision of the Tribunal in the case of Rughani Brothers Vs. CST Mumbai reported in 2015 (9) TMI 684-CESTAT Mumbai, wherein it has been held that as per Section 70 before the amendment, a penalty of Rs. 2,000/- per return is the maximum penalty which can be imposed under Rule 7C. He also submitted that only one return pertaining to the period October 2010 to March 2011, the total penalty which can be imposed is Rs.6,000/-. Moreover, the two returns are nil returns and other six returns were late for which only a penalty of Rs. 12,000/- can be imposed as these returns were pertaining to period before amendment. Further, in support of his submission, he relied upon the following submissions:
* CCE, Mumbai-I Vs. Lal Mining Engg. Works reported in 2007 (215) ELT 167 (SC); * Suchak Marketing Pvt Ltd Vs. CST, Kolkata reported in 2013 (30) STR 593 (Tri.-Kolkata); * Amrapali Barter Pvt Ltd Vs. CST, Kolkata reported in 2013 (32) STR 456 (Tri.-Kolkata).
5. On the other hand, the Learned AR reiterated the findings of the impugned order.
6. After considering the submissions of both the parties and perusal of provisions of section 70 of the Finance Act, 1994, prior to its amendment and after the amendment effective from 08.04.2011, I find that with regard to six returns the appellant is liable to pay Rs. 12,000/- penalty at the rate of Rs. 2,000/- per return. I also find that the two returns pertaining to the period April 2009 to Sept. 2009 and April 2010 and Sept. 2010 were nil return and therefore, he is not liable to pay any penalty for the nil return as held in the case of Suchak Marketing Pvt Ltd Vs. CST, Kolkata, cited supra. Further, I also find that as per Rule 7C the appellant is liable to pay Rs. 6,000/- as penalty for the return pertaining to October 2010 to March 2011. Therefore, in all maximum penalty which can imposed on the appellant is Rs. 18,000/- and therefore I am of the view of that the impugned order imposing the penalty of Rs. 1,80,000/- is wrong and illegal and infact the appellant is liable to pay only Rs. 18,000/- as penalty and the appellant has stated that he has already paid Rs. 17,500/- vide challan dated 04.07.2017. The lower authority will verify the amount already paid by the appellant and if any shortfall is there the same will be recovered from the appellant. Accordingly, the appeal of appellant is partly allowed and the penalty is reduced to Rs. 18,000/-.
(Order was dictated in Open Court on 27/10/2017) S.S GARG JUDICIAL MEMBER RB 1