COMMISSIONER OF C. EX., AHMEDABAD Vs. SAGAR ENTERPRISES

JUDGEMENT

(1.) THE appellant is engaged in providing man power recruitment and supply services. It was pointed to him by the department that he was liable to pay Service tax with effect from 16-6-2005 and based on the advice given by the department, appellant registered himself as service provider on 1-4-2006 and paid Service tax amount with interest on 22-10-2007. Subsequently on 8-4-2008, show cause notice was issued and after adjudication and appellate proceedings, penalty of Rs. 2,12,905/- under Section 76 and 78 of Finance Act, 1994 and penalty of Rs. 1000/- under Section 78 have been imposed. Party is in appeal against imposition of penalty and Revenue has also filed appeal against the reduction of penalty to 25% under Section 78 of Finance Act, 1994 by the Commissioner (Appeals).

(2.) SHRI Vipul Khandhar, learned Chartered Accountant on behalf of the appellants submits that the appellant firm is a very small firm and acts as a labour contractor and started functioning only from April 2005. Since Shri Rasikbhai Parekh, authorized signatory was looking after all the work, there was a mistake on his part because of his ignorance of law. When he was made aware of the liability, before issue of show cause notice he has paid Service tax with interest and therefore, he submits that Provision of Section 73(3) of Finance Act, 1994 is applicable to the case of the appellant and penalties imposed may be set aside. He relied upon following decisions of the Tribunal in support of his contention :-

(3.) LEARNED SDR on the other hand submits that appellants paid Service tax after more than one year after it was pointed out and after his registration and his plea for ignorance of law is not accepted.