The Commissioner of Central Vs. Chintamani Mangal Karyalaya Pvt. - Court Judgment

Excerpt:
1. this appeal is directed against the order-in-appeal dated 21/08/2096, vide which the ld. commissioner (appeals) has set aside the penalties imposed on the respondent.2. the issue involved in this case is regarding the taxability of the services provided by the respondent as mandap keeper. the respondent did not get themselves registered for the said services provided.subsequently, on being pointed out by the departmental officer, the respondent got themselves registered and discharged the service tax liability and interest thereon. show cause notice was issued for the imposition of penalty under section 76 and 77 of the finance act, 1994 for non-payment of service tax liability and non filing of returns by the respondent. on adjudication, the adjudicating authority imposed penalties under section 76 & 77 of the finance act, 1994. on an appeal, the ld. commissioner (appeals) found reasonable cause in non-payment of service tax and the interest thereon in time by the respondent, on such finding set aside the penalties imposed by the adjudicating authority.hence, this appeal by the revenue.3. the ld. dr re-iterates the findings of the adjudicating authority, takes me through grounds of appeal and submits that the ld.commissioner (appeals) has erred in setting aside the penalties.4. the ld. consultant appearing on behalf of the respondent submits that the order of the appellate authority is correct and does not require any interference. it was also her submission that the respondent had taken registration certificate voluntarily and not on the direction of the authorities.5. considered the submission made in detail by both sides and perused the records. the ld. commissioner (appeals) in his impugned order has held as under: i have carefully gone through the records of the case and the submissions, both oral & written, made by the appellant. penalties of rs. 1,23,105/- (equal to the amount of tax involved) and rs. 1,000/- have been imposed on the appellant. the appellant has requested for waiver under section 80 ibid. service tax was a new levy and the delay in paying the tax and submitting the returns at quarterly interval (instead of monthly interval) have been stated to be due to their lack of awareness about the new service tax liability. i consider it a "reasonable cause" for their failure under the purview of section 80 ibid and waive the penalty imposed. this apart, the appellant had paid up the tax along with interest much before the issue of the scn and so they are not liable to penalty in terms of judgment in the case of mass marketing & advertising pvt. ltd., v. cce bangalore 2006 (75) plt 50 (cestat bangalore).6. from the above re-produced portion of order, it is very clear that the service tax levy on mandap keeper being a new levy and the respondent was unaware that services rendered by them were covered under service tax net. the ld. commissioner (appeals) has rightly invoked the provisions of section 80 and set aside the penalties imposed on the respondent. i find that there is nothing on record contradicting the above finding or in the grounds of appeal filed by the revenue. further, i find that the issue is covered by the numerous decisions of the tribunal setting aside penalties under amnesty scheme introduced by government, as respondent has paid the service tax before the expiry of the amnesty scheme. the said amnesty scheme says that if service tax liability along with interest is paid within the stipulated time, there would not be any penalty on the assessee. accordingly, in view of the facts and circumstances of the case, i find that the order of the ld. commissioner (appeals) is reasoned one and correct, hence, does not require any interference.7. the appeal filed by the revenue is dismissed and the cross objection filed by the respondent being in support of the impugned order is also disposed off.

Judgment:
1. This appeal is directed against the order-in-appeal dated 21/08/2096, vide which the Ld. Commissioner (Appeals) has set aside the penalties imposed on the respondent.

2. The issue involved in this case is regarding the taxability of the services provided by the respondent as Mandap Keeper. The respondent did not get themselves registered for the said services provided.

Subsequently, on being pointed out by the departmental officer, the respondent got themselves registered and discharged the service tax liability and interest thereon. Show cause notice was issued for the imposition of penalty under Section 76 and 77 of the Finance Act, 1994 for non-payment of service tax liability and non filing of returns by the respondent. On adjudication, the adjudicating authority imposed penalties under Section 76 & 77 of the Finance Act, 1994. On an appeal, the Ld. Commissioner (Appeals) found reasonable cause in non-payment of service tax and the interest thereon in time by the respondent, on such finding set aside the penalties imposed by the adjudicating authority.

Hence, this appeal by the revenue.

3. The Ld. DR re-iterates the findings of the adjudicating authority, takes me through grounds of appeal and submits that the Ld.

Commissioner (Appeals) has erred in setting aside the penalties.

4. The Ld. Consultant appearing on behalf of the respondent submits that the order of the appellate authority is correct and does not require any interference. It was also her submission that the respondent had taken registration certificate voluntarily and not on the direction of the authorities.

5. Considered the submission made in detail by both sides and perused the records. The Ld. Commissioner (Appeals) in his impugned order has held as under: I have carefully gone through the records of the case and the submissions, both oral & written, made by the appellant. Penalties of Rs. 1,23,105/- (equal to the amount of tax involved) and Rs. 1,000/- have been imposed on the appellant. The appellant has requested for waiver under Section 80 ibid. Service Tax was a new levy and the delay in paying the tax and submitting the returns at quarterly interval (instead of monthly interval) have been stated to be due to their lack of awareness about the new Service Tax liability. I consider it a "reasonable cause" for their failure under the purview of Section 80 ibid and waive the penalty imposed.

This apart, the appellant had paid up the tax along with interest much before the issue of the SCN and so they are not liable to penalty in terms of judgment in the case of Mass Marketing & Advertising Pvt. Ltd., v. CCE Bangalore 2006 (75) PLT 50 (CESTAT Bangalore).

6. From the above re-produced portion of order, it is very clear that the service tax levy on mandap keeper being a new levy and the respondent was unaware that services rendered by them were covered under Service Tax net. The Ld. Commissioner (Appeals) has rightly invoked the provisions of Section 80 and set aside the penalties imposed on the respondent. I find that there is nothing on record contradicting the above finding or in the grounds of appeal filed by the revenue. Further, I find that the issue is covered by the numerous decisions of the Tribunal setting aside penalties under amnesty scheme introduced by Government, as respondent has paid the service tax before the expiry of the amnesty scheme. The said amnesty scheme says that if service tax liability along with interest is paid within the stipulated time, there would not be any penalty on the assessee. Accordingly, in view of the facts and circumstances of the case, I find that the order of the Ld. Commissioner (Appeals) is reasoned one and correct, hence, does not require any interference.

7. The appeal filed by the revenue is dismissed and the cross objection filed by the respondent being in support of the impugned order is also disposed off.