Shree Khodiyar Security Guard Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. this is an appeal against the order of commissioner (appeals) no.commr(a)/15/vdr-i/2006, dt. 20-3-06, by which commissioner (appeals) has upheld the demand of service tax amounting to rs. 31,952/- for the service rendered by the appellant for the period april 2000 to april 2004 to his client m/s. p & b pharmaceuticals ltd. 2. the learned consultant appearing for the appellant does not dispute the duty demand and the interest which they have already paid. he submits that his client is basically from a remote village; he himself is doing the job of security guard with a few more persons from the village; the appellant is not an educated person; he is not aware of the law, and he has rendered security services to m/s. p & b pharmaceuticals ltd., which is also in a remote area. he submits that in addition to confirmation of demand of service tax of nearly rs. 32,000/-, imposition of penalty is really causing hardship to his client.3. he relied on the judgment of tribunal in the case of george thomas v. cce kanpur reported in 2006 (1) s.t.r. 116 (tri-bang.) wherein in view of the financial hardship claimed by the appellant, penalty was reduced to rs. 1000/-each under sections 765 (sic) (76), 77 & 78.4. i find in this case, both the service provider and service receiver are in remote area. looking into the entire background of the appellant, it appears that it is basically out of ignorance of newly introduced law, the appellant has not fulfilled his obligations. the demand of duty relating to four years comes to about rs. 32,000/- which is indicative of the smallness of the operation. this really is a deserving case for applying the leniency provided under section 80.5. therefore, while confirming the duty and interest as uncontested, i set aside the penalties imposed on the appellant.

Judgment:
1. This is an appeal against the order of Commissioner (Appeals) No.Commr(A)/15/VDR-I/2006, dt. 20-3-06, by which Commissioner (Appeals) has upheld the demand of Service Tax amounting to Rs. 31,952/- for the service rendered by the appellant for the period April 2000 to April 2004 to his client M/s. P & B Pharmaceuticals Ltd. 2. The learned consultant appearing for the appellant does not dispute the duty demand and the interest which they have already paid. He submits that his client is basically from a remote village; he himself is doing the job of security guard with a few more persons from the village; the appellant is not an educated person; he is not aware of the law, and he has rendered security services to M/s. P & B Pharmaceuticals Ltd., which is also in a remote area. He submits that in addition to confirmation of demand of service tax of nearly Rs. 32,000/-, imposition of penalty is really causing hardship to his client.

3. He relied on the judgment of Tribunal in the case of George Thomas v. CCE Kanpur reported in 2006 (1) S.T.R. 116 (Tri-Bang.) wherein in view of the financial hardship claimed by the appellant, penalty was reduced to Rs. 1000/-each under Sections 765 (sic) (76), 77 & 78.

4. I find in this case, both the service provider and service receiver are in remote area. Looking into the entire background of the appellant, it appears that it is basically out of ignorance of newly introduced law, the appellant has not fulfilled his obligations. The demand of duty relating to four years comes to about Rs. 32,000/- which is indicative of the smallness of the operation. This really is a deserving case for applying the leniency provided under Section 80.

5. Therefore, while confirming the duty and interest as uncontested, I set aside the penalties imposed on the appellant.