PINK CITY COMMUNICATIONS Vs. CST

JUDGEMENT

(1.) THIS is an appeal filed against the order of Commissioner (Appeals) Delhi -III, in which the appellants have been imposed various penalties under Sections 76, 77 and 78 of the Finance Act, 1994. The Commissioner (Appeals) in the impugned order dated 4.8.2006 as made the following observations. I have carefully gone through the impugned order, facts of the case, grounds of appeal and submissions made at the time of personal hearing. There is no dispute that service tax was leviable on the appellant. The appellant is mainly agitating on the imposition of penalty and cited case of Machine Montel (I) Ltd., 2004 (168) ELT 466 (T) holding that penalty is not imposable where duty has been deposited before issue of show cause notice. I find that the appellant was franchisee (authorized distributor) of M/s Air Tel who is also service tax provider since many years. The Govt. is advertising in respect of service tax through television, newspapers etc so that public become aware of service tax payable services and main provisions. Therefore, the appellant's please that he was not aware of service tax is not tenable. The appellant's pleas that service tax paid before issue of show cause notice in view of the Machino Montell case penalty is not imposable. In the case of M/s Hero Honda Motors Ltd. v. CCE. Delhi -III CESTAT Delhi in the final order No. A/728/05 -NB -SM dated 26.4.05 held that "mere deposit of duty amount before the issuance of show cause notice against the cost of reputation is not much help to the appellants. This payment of duty cannot be said to be a voluntary act. The evasion was detected by the department and after having been caught on the wrong foot, they cannot escape the liability for payment of penalty by simply depositing the duty before the issuance of show cause notice." Therefore, penalty under Section 11AC equal to the amount of the evasion/short payment of duty by the appellant is leviable. Similar direction were passed by CESTAT Delhi in the Final order No. A/797/05/05 -NB(SM) dated 4.5.05 in the case of M/s Sunbeam Castings Gurgaon v. CCE, Delhi -III. The appellant produced copies of the judgments in the cases of (i) Catalyst Capital Services Pvt. Ltd. v. CCE Mumbai -IV. in this case assessee delayed payment of service tax (ii) Palika Palace v. CCE, Chandigarh assessee delayed tiling of return (iii) CCE Kolkata v. LIC of India; there was short payment of tax. On perusal I find that the facts and circumstances of these cases are different from the present case. The appellants got registered and deposited duty when it was detected by the department. Therefore, penalty has rightly been imposed under Sections 76, 77, 78 of the Finance Act, 1994. Service tax was calculated on the basis of data provided by the principle company. In view of the above I do not feel need to interfere with the impugned order.

(2.) NONE represented the appellant despite notice. The learned authorized representative (DR) heavily relies upon the recent judgment of Punjab and Haryana High Court in the case of CCE, Delhi -III v. Machine) Montell (I) Ltd., wherein it was held that penalty is imposable even where duty has been deposited before issue of show cause notice. In view of this, he argues that the lower authorities have imposed penalty in accordance with law after passing detailed orders.

(3.) I have perused the record and examined various grounds of appeal mentioned in the appeal petition. I do not find any lacuna on the part of orders passed by the lower authorities. I, therefore, dismiss the appeal upholding the order of the Commissioner (Appeals).