COMMISSIONER OF SERVICE TAX Vs. SKEMATIC CONSULTANTS

JUDGEMENT

(1.) THE Ld. JDR seriously argued that the appellant are penalised for willful breach of law and lawlessness shall not be allowed to perpetuate. He submitted that entire order of adjudication should have been confirmed by the Ld. Appellate Authority without any lenient consideration when the respondent submitted nil return suppressing facts and even after clarification was issued to remove confusion. They filed revised return for October, 1998 to March, 1999 and for rest of the period they remained silent. Therefore, the first appellate order calls for modification upholding the order of adjudication. Ld. JDR relied on the order of the Tribunal in the case of ETA Engg. Ltd. v. Commr. of Central Excise, Chennai reported in 2006 (3) S.T.R. 429 (Tri. -LB) = 2004 (174) E.L.T. 19 (Tri. -LB).

(2.) MR . Amit Roy, Authorised Representative appearing for the Respondent submitted that they had no intention at all to evade payment of service tax payable but the levy being under judicial review by Honble High Court of Kolkata to decide on various issues of the levy on professionals like architecture, they failed to comply to the law. The Respondent is a professional firm and rendering intellectual services and deserves lenient consideration for no provision in their contract for realization of the service tax from the clients, they faced serious financial hardship for which there was unintentional delay. They voluntarily came forward to comply with the law and gradually also discharged their tax liability. When they could understand that the levy is justified, they carried out the direction of the Ld., Commissioner (Appeal) and already discharged the penalty demand of Rs. 1,43,052.40. This was unreasonable burden imposed by lower appellate authority which may also be waived to do justice to professionals of this country who have discharged tax liability.

(3.) HEARD both sides. Perused the record. The Ld. Commissioner by speaking order had reasoned to reduce the penalty under Section 78 of the Finance Act, 1994. It is revealed that proper service tax liability was recorded in the accounts of the Respondent acknowledging its liability to the union of India proving law abiding nature of the Respondent. But for non -realisation of the service tax from the client, they were prevented to discharge their liability. It is a fact that they came forward to comply with requirement of law when notices were served. However, such compliance was done belatedly. They proved their conduct to be fair, acknowledging liability, filing revised return for part of the period October, 1998 to March, 1999. But remained silent for rest of the period. Record does not reveal that mischief like fraud, collusion, willful misstatement or suppression of fact or deliberate breach of law which are elements of Section 78, were not present in this case. It appears there were reasonable cause on the part of the Respondent to discharge the service tax liability belatedly but there was no intention to evade payment of service tax.