Custom, Excise & Service Tax Tribunal
Ecie Impact Pvt. Ltd vs Commissioner Of Service Tax ... on 7 December, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/26309/2013-SM [Arising out of Order-in-Appeal No. 411/2012 dated 06/01/2013 passed by the Commissioner of Central Excise, Bangalore-II ( Appeals) ] For approval and signature: HON'BLE SHRI ASHOK K. ARYA, 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes ECIE Impact Pvt. Ltd. P.O. Box No. 3, 8th Milestone, Tumkur Road, T. Dasarahalli Bangalore 560 057 Karnataka Appellant(s) Versus Commissioner of Service Tax Bangalore-Service Tax 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore 560 071 Karnataka Respondent(s)
Appearance:
Shri K. K. Varier, Consultant VST Associates Sri Balaji Nilaya, No.81, 5th Cross, Bapuji Layout, Off Subbanna Garden, Vijayanagar, Bangalore - 560 040 For the Appellant Shri Pakshi Rajan, DR For the Respondent Date of Hearing: 07/12/2015 Date of Decision: 07/12/2015 CORAM:
HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Final Order No. 22139 / 2015 Per : ASHOK K. ARYA Both the sides have been heard.
2. The matter concerns with the imposition of penalty of Rs. 13,23,419/- (Rupees Thirteen Lakhs Twenty Three Thousand Four Hundred and Nineteen only) under Section 78 of the Finance Act 1994.
3. The appellant argues that they did not have any intention to evade the payment of service tax and they should be given the benefit of the CBECs letter F. No. 137/167/2006-CX-4 dated 03.10.2007; the learned consultant, Shri K.K. Varier, appearing for the appellant, says that above letter of the CBEC allows them the benefit of non-imposition of penalty, when service tax was voluntarily deposited by them.
3.1. The learned consultant Shri K.K. Varier is quoting Honble Karnataka High Courts judgment in the case of CCE & ST, LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. [2012 (26) S.T.R. 3 (Kar.)] saying that as they have paid the service tax along with interest for the delayed payment before issue of show-cause notice they are to be given benefit of non-imposition of penalty.
4. Learned AR Shri Pakshi Rajan for the Revenue argues that the facts in this case do not warrant waiver of penalty on any count; provisions of Section 73 do not cover their case for waiver of penalty. He also cites CESTAT, Ahmedabads decision in IWI Crogenic Vaporization Systems India Vs. CCE, Cus. & ST, Vadodara-II [2015-TIOL-1458-CESTAT-AHM] in support saying that there is no reason in this case to interfere with the penalty imposed by the lower authorities on the appellant.
5. After careful examination of the context, facts of the case and the submissions of appellant as well as the Revenue it is clear that the appellant paid the duty and the interest before issue of show-cause notice; however nowhere the facts support the contention of the appellant that they did not have the intention not to pay the service tax due to the exchequer. The learned consultant Shri K.K. Varier argues that all along they paid due service tax and they informed the Department on this. The facts on the other hand clearly indicate that this amount they showed in the documents only later i.e. after the conduct of the audit by CAG. This amount was computed as service tax due in respect of the deposits, the appellants had taken as security from their customers and this fact was not informed to the Department earlier; it was revealed only during audit of CAG. Had the CAG audit not been conducted the appellant would not have any time shown these payments as the receipts for computation of liability of service tax due to the exchequer. The learned consultant for the appellant is arguing that they never had any intention to evade but this is only empty talk; he has no documents to prove the non-intention of evasion of service tax on the part of the appellant. When the amount has been received (in whatever form, here shown as security deposits by the appellant) service tax becomes due, as the amount was received for the services to be provided or being provided by the service provider. Above facts clearly indicate that the appellant had no intention to discharge their liability of service tax on the subject receipts called as security deposits.
5.1. The learned consultant for the appellant cited the Honble Karnataka High Courts decision in the case of CCE & ST, LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. (supra) saying that they are not liable to pay duty. However this judgment is on the recovery of penalty under Section 76 of the Finance Act, 1994, and not on the penalty imposed under Section 78 of the Finance Act, 1994. Therefore, strictly speaking it will not be applicable to present facts. Further the provisions of law viz. Section 73 (4) of Finance Act 1994 are very clear saying that the cases where short payment or non payment is on account of willful misstatement, suppression of facts or where there is intention to evade payment of service tax, provisions of Section 73(3) of Finance Act 1994 would not be applicable. It has been made clear earlier that by virtue of the fact of not informing about the receipt of the security deposits taken from the customers on account of services provided or to be provided to the customers, the appellant has willfully suppressed the fact with intention to evade payment of service tax. Therefore the decision of the Honble High Court quoted above would not be applicable to the facts in the present case and further the CBECs letter F. No. 137/167/2006-CX-4 dated 03.10.2007 is also not applicable to the facts of the appellant.
5.2. The Revenue has quoted CESTAT, Ahmedabads decision in case of IWI Crogenic Vaporization Systems India Vs. CCE, Cus. & ST, Vadodara-II (supra) which supports the principle that wherever there has been intention of non-payment of service tax to the exchequer the benefit of waiving the penalty, which has been imposed under Section 78 of the Finance Act 1994, would not be available.
5.3. Further the appellant has already paid the penalty of Rs. 2,000/- (Rupees Two Thousand only) imposed under Section 77 of the Finance Act, 1994. As it is clear that the appellant filed their Service Tax Returns late, considering the respective Laws/Rules on the subject of Service Tax, there is no question of waiving the said penalty of Rs. 2000/- (Rupees Two Thousand only) imposed on the appellant under Section 77.
6. Considering the above discussions the appeal does not sustain and is hereby disallowed and disposed of in above terms.
(Order pronounced in open court) (ASHOK K. ARYA) TECHNICAL MEMBER iss