V.G. PAPER AND BOARDS LTD. Vs. CCE

JUDGEMENT

(1.) THIS is an application filed by M/s. V.G. Paper and Boards Ltd., Udumalpet seeking waiver of predeposit for hearing the appeal and also for stay of recovery of interest and penalty ordered by the Commissioner on revision of the original authority's order dropping penal proceedings and demand of interest. The appellants had availed Goods Transport Operators service during the period 16.11.97 to 2.6.98 without registering themselves, paying the service tax due and without filing ST -3 Returns. The violations of the statutory provisions involved had been regularized by the judgment of the apex Court in Laghu Udyog Bharathi case which struck down Sub -clauses XII and XVII of Clause (d) of Sub -rule (1) of Rule 2 of Service Tax Rules, 1994 as ultra vires of the Finance Act 1994. Subsequently, Finance Act, 2003 enacted statutory provisions reviving the liability as they existed prior to the Laghu Udyog Bharathi judgment (supra). In terms of Section 71A of the Finance Act, 2003, persons who had availed GTO services during 16.11.97 to 02.06.98 were required to file return in respect of the said service availed by them within 6 months of the Finance Bill 2003 receiving the assent of the President. As per Notification No. 4/2003 dt. 14.5.2003, such availors of GTO service were required to file return within 6 months of 13.5.2003 in line with the provisions of Section 71A. The Notification also provided that failure to pay service tax and file ST -3 return within the prescribed time would invite interest and penal consequences.

(2.) IN the instant case, the appellants paid the tax due of Rs. 55,176/ - on 6.9.2002 following a SCN issued to demand service tax, interest thereof and impose penalty on the appellants. Deciding the SCN, the original authority appropriated the service tax paid and dropped further proceedings. The impugned order has been passed on revision of the order of the original authority. After hearing both sides on the application, I dismiss the stay application and take up the appeal itself for disposal.

(3.) HEARD both sides. In the impugned order, the Commissioner has reproduced Section 71A and has found that the said section did not extend the concession for payment of service tax which had not been paid. He found that the appellants should have paid the service tax due for the period 16.11.97 to 2.6.98 for every month involved in the period by 25th of the following month. Thus, for having failed to comply with the provisions of service tax, he held the appellants liable to pay interest under Section 75 of the Finance Act 1994 and also for penalty under Section 76 of the Finance Act. He imposed a penalty of Rs. 55,176/ - and demanded interest on the service tax due and paid.