Custom, Excise & Service Tax Tribunal
Cce, Ludhiana vs M/S. Green Line Housing Finvest Ltd on 4 October, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066 COURT NO. II Service Tax Appeal No. 2720 of 2012 [Arising out of Order-in-Appeal No. 147/ST/APPL/CHD-II/2012 dated 17.5.2012 passed by the Commissioner (Appeals), Customs & Central Excise, Chandigarh-II, Chandigarh] Date of Hearing/decision: 4th October, 2012 CCE, Ludhiana Appellant Vs. M/s. Green Line Housing Finvest Ltd., Respondent
Present for the Assessee : Shri N. Pathak, D.R. Present for the Respondent : Shri Daljit Singh Chabra, Adv.
Coram: Honble Shri D.N. Panda, Judicial Member;
Honble Shri Mathew John, Technical Member FINAL ORDER NO. ________________ Per D.N. Panda:
We have heard this matter in great length before lunch session and after that. Our anxiety was to find out whether there was a case under Section 80 of Finance Act, 1994 to waive penalties imposed under law.
2. Revenues submission was that the appellant had defiant attitude to comply with the law. Against this, respondent points out that when the levy came into force subsequent to the tender submitted by Respondent to the Jullundur Improvement Trust, in absence of reimbursement clause in the contract, that deprived the Respondent to realise service tax element from the Trust. However, service tax being an indirect tax that was realisable.
3. Revenues rival argument was that innocence of the respondent does not come out from record. When law came into force, work was in the process of execution and, it was within the knowledge of Respondent that it had incurred service tax liability. Against summons, the Respondent failed to respond. Despite arise of service tax liability of the respondent, learned first appellate authority invoked Section 80 of Finance Act, 1994 and without appreciating that there was no reasonable cause at all to grant immunity from penalty, he allowed relief from penalty.
4. Heard both sides and perused the record.
5. So far as the liability of service tax is concerned there was no dispute by the Respondent. That follows interest. This aspect also remained undisputed. Penalty became payable when tax liability was not discharged. Failure to discharge service tax liability dragged the Respondent to present litigation for undue benefit of waiver of penalty granted by learned Commissioner (Appeals).
6. We have perused para 4 of show cause notice and found defiance attitude of the Respondent towards law. Summons were issued by Revenue on two occasions to seek information from the respondent. But the Respondent failed to provide information to the Authority establishing scanty regard to law.
7. Above material facts call for judging whether there was reasonable cause to invoke section 80 of the Finance Act, 1994 by learned Commissioner (Appeals). First appellate order has ignored defiant attitude of the Respondent and learned first appellate authority granted blanket relief to the Respondent on the ground that service tax levy on the activity was after submitting tender. No doubt, indirect taxes permit shifting of incidence but does not immune a tax payer from tax liability in the event of non-recovery from consumers. Liability being fastened with the service provider upon incidence of tax, it was required to be seen whether the service provider at any time came forward to ascertain its liability approaching the department or having any legal opinion at its end to believe bonafide that it is not liable to tax . No legal opinion was placed before the authorities below to prove bonafide. Nor such opinion or correspondence made with department to show innocence as placed before us. Therefore, we do not consider that this is a fit case to be governed by Section 80 of Finance Act, 1994. Accordingly, we reverse decision of learned Commissioner (Appeals) on the issue of penalty as appearing at Para 6 of first appellate order.
8. In view of the above, we consider that levy of penalty under Section 76 & 78 simultaneously is unwarranted. Therefore, there shall be waiver of penalty imposed under Section 76 of Finance Act, 1994 while penalty under section 78 of Finance Act, 1994 is confirmed. Since there was continuation of economic activity providing taxable service, penalty under Section 77 is also confirmed.
9. When we notice that the Respodnent has come forward at a later stage to comply with the law, we do reduce the litigation reducing penalty under Section 78 to 25% of Service Tax liability. This concession in penalty shall be permissible only if the Respondent pays 25% of service tax liability towards penalty under that section within 30 days of receipt of this order. Failure to make payment thereof shall take away the right to concession in penalty granted by this order and entire penalty imposed under Section 78 by adjudication order shall be realisable.
8. With the aforesaid observations and conclusion we allow Revenues appeal partly.
(Dictated & pronounced in the Open Court) (D.N. PANDA) JUDICIAL MEMBER (MATHEW JOHN) TECHNICAL MEMBER RK 4 ST/2720/2012-Cu