Custom, Excise & Service Tax Tribunal
M/S Deeksha Travels Pvt. Ltd. 105, 2Nd ... vs Commissioner Of Service Tax, Bangalore on 14 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/3183/2011 [Arising out of Order-in-Original No. 156/2011 dated 29.09.2011 passed by Commissioner of Service Tax, Bangalore] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL 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 M/s Deeksha Travels Pvt. Ltd. 105, 2ND Floor, Brigade Road, Bangalore 560025. Appellant(s) Versus Commissioner of Service Tax, Bangalore 1st to 5th Floor, TTMC Building Domlur, Bangalore-560071. Respondent(s)
Appearance:
Shri B. Venugopal, Advocate For the Appellant Shri Pakshirajan, A.R. For the Respondent Date of Hearing: 09/10/2015 Date of Decision: 14/10/2015 CORAM :
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. 22060 / 2015 As per facts on records, the appellant has registered with the Service Tax department under the category of Tour Operators Services. During the course of audit of the appellants record, it was noticed that they have not paid service tax to the tune of Rs. 51,65,920/- for the period April 2009 to September 2009. The appellant admitted their service tax liability but contended that they were providing services to M/s Kingfisher Airlines, who were not making payment regularly to them. On receipt of such payment from M/s Kingfisher Airlines, the amounts were used for their business purpose like EMI for the loan taken, drivers / staff salary, fuel and maintenance charges. They have deposited an amount of Rs. 39,27,383/- before issuance of show-cause notice and the balance amount was deposited by them after issue of show-cause notice along with interest.
2. Proceedings were initiated for imposition of penalty under Section 76 of the Finance Act as also under Section 77 of the Finance Act, 1994. The penalty imposed by the Commissioner is to the tune of Rs. 200/- per day or at 2% the service tax, per month, whichever is higher, under Section 76 of the Finance Act and penalty of Rs. 1000/- under Section 77 of the Finance Act.
3. Challenging the imposition of penalty, learned advocate for the appellant submits that the appellant did not have any mala fide intention to evade payment of service tax inasmuch as they were filing Returns duly reflecting the service tax required to be deposited. He, however, fairly accepts that the service tax amount stand received by them from M/s Kingfisher Airlines who were their major customer. The said service tax received by them could not be deposited with the Revenue as they were having over burden financial difficulties. In such a scenario, he prays for setting aside the penalty.
4. Countering the arguments, learned A.R. submits that admittedly, the appellants have used the exchequer money received by them from their client, for their business and financial gains. Section 76 of the Finance Act fairly provides for imposition of penalty for such delayed payments by the assessee. He strongly relies upon the Kerala High Courts decision in the case of Assistant Commissioner of Central Excise Vs. Krishna Poduval [2006 (1) S.T.R. 186 (Ker.)], wherein it was held, while dealing with the provisions of Section 76 of the Finance Act, the person who is guilty of suppression deserve no sympathy. Accordingly, the order of the Single Judge withdrawing penalty was set aside.
5. The facts are not in dispute. The appellants have provided services leviable to service tax during the relevant period. They have also received the service tax amounts from the service receiver but the same was not being deposited with the Revenue. This fact came into light on conducting the audit of the records. The appellants have admitted their service tax liability and have deposited the same along with interest. The contention of the learned advocate that interest should be treated as penal in nature and the penalty imposed under Section 76 cannot be accepted inasmuch as the same would render the provisions of Section 76 as futile and otiose.
6. In view of the clear contravention of law, I find no infirmity in imposition of penalty by the Commissioner, requiring any interference. Accordingly, appeal filed by the appellant is rejected.
(Pronounced in open court on 14/10/2015) (ARCHANA WADHWA) JUDICIAL MEMBER /vc/