MOUNT SHIVALIK INDUSTRIES LTD. Vs. CCE AND C

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal dated 27.9.2005 wherein the Commissioner (Appeals) has upheld the Order -in -Original imposing penalty and seeking to recover interest from the appellants.

(2.) THE relevant facts that arise for consideration are that the appellants were receiving services of GTO for the period from 16.11.97 to 2.6.98. Validity of these services were challenged in the Supreme Court and a retrospective amendment was carried out to the Finance Act and the appellants were required to pay their service tax as recipient of services of GTO. The appellants discharged the service tax liability on 9.2.04, 16.2.04 and 1.3.2004. Show cause notice was issued to the appellants in November, 2004 directing them to show cause as to why penalty should not be imposed and interest should not recovered from them for depositing the service tax liability late. The appellants contested the show cause notice and the adjudicating authority vide Order -in -Original dated 14.6.2005 imposed penalty of Rs. 41,910.00 and also directed to pay interest as per the provisions of Section 75 of the Finance Act, 1994. On appeal the Commissioner (Appeals) also upheld the Order -in -original. Hence, this appeal.

(3.) LEARNED Advocate appearing for the appellants submits that the amendment carried out by Section 116 and 117 of Finance Act, 2000 was to bring the GTO services into net of service tax and to validate any action taken for recovery of such services for the period from 16.11.97 to 2.6.98. He also submitted that the amendment to Section 68 was carried out to make the person who has not yet paid the Service Tax but liable to pay, by Finance Bill 2003 and assented by the President on 17.5.2003. He submits that, as per the provision of Section 71A which were introduced, they are required to file return on 17.1 1.2003. It was his submission that due to this retrospective amendment the interest liability, if any, at all, would start from 17.11.2003. He further submits that the Hon'ble Supreme Court in the case of Gujarat Ambuja Cements Ltd. v. UOI as reported at has extended the period for filing the returns from 17.11.2003 to further two weeks. He also submits that since the amount of service tax liability was paid before issue of show cause notice, no penalty is warranted as held by the Larger Bench of the Tribunal in the case of CCE, Delhi -III, Gurgaon v. Machine Montell (I) Ltd. as reported at .