identity Advertising Associates Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. this appeal has been filed against oia no. 99/06 dated 22.5.06 passed by the commissioner of central excise and customs (appeals) cochin. learned advocate submitted that the issue relates to non-payment of service tax for the period from 2000 to 2005. the appellant is a proprietary concern and he was not aware of the service tax laws. however, the appellant paid the service tax liability along with interest on 8.2.05. the show cause notice has been issued only on 29.9.05. as the tax liability along with interest has been discharges well before the issue of show cause notice, the learned advocate pleaded that penalty is not leviable. he cited the following decisions in which it has been held that when duty is paid before the issue of show cause notice, no interest and penalty are leviable.deprocon engineering pvt ltd and ors. v. cce bangalore final order no. 4) kitex ltd., v. cce cochin final order no. 2082/06 dated 21.12.2006 passed by cestat, bangalore he said that he is not challenging the levy of interest which has already been paid. he urged that this bench has been taking a consistent stand on this issue.2. the learned dr urged that the appellant had not taken registration for payment of service tax as required under the finance act and evaded tax liability for five years. as the longer period has been invoked he said that the imposition of penalty is justified.3. i have gone through the records of the case carefully. the tax liability comes to rs. 4.75 lakhs. when it was pointed out that tax has not been paid, the appellant discharged the duty liability along with interest even without waiting for the show cause notice. he has pleaded ignorance of service tax provisions. as this tribunal has taken a consistent stand on the issue in the light of various decisions cited (supra) by the learned advocate, i allow the appeal by setting aside the penalty.

Judgment:
1. This appeal has been filed against OIA No. 99/06 dated 22.5.06 passed by the Commissioner of Central Excise and Customs (Appeals) Cochin. Learned advocate submitted that the issue relates to non-payment of service tax for the period from 2000 to 2005. The appellant is a proprietary concern and he was not aware of the Service Tax laws. However, the appellant paid the service tax liability along with interest on 8.2.05. The show cause notice has been issued only on 29.9.05. As the tax liability along with interest has been discharges well before the issue of show cause notice, the learned advocate pleaded that penalty is not leviable. He cited the following decisions in which it has been held that when duty is paid before the issue of show cause notice, no interest and penalty are leviable.Deprocon Engineering Pvt Ltd and Ors. v. CCE Bangalore Final Order No. 4) Kitex Ltd., v. CCE Cochin Final Order No. 2082/06 dated 21.12.2006 passed by CESTAT, Bangalore He said that he is not challenging the levy of interest which has already been paid. He urged that this bench has been taking a consistent stand on this issue.

2. The learned DR urged that the appellant had not taken registration for payment of service tax as required under the Finance Act and evaded tax liability for five years. As the longer period has been invoked he said that the imposition of penalty is justified.

3. I have gone through the records of the case carefully. The tax liability comes to Rs. 4.75 lakhs. When it was pointed out that tax has not been paid, the appellant discharged the duty liability along with interest even without waiting for the show cause notice. He has pleaded ignorance of service tax provisions. As this Tribunal has taken a consistent stand on the issue in the light of various decisions cited (supra) by the learned advocate, I allow the appeal by setting aside the penalty.