VISRANTHI BUILDERS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN this case demand of service tax was confirmed against the assessees who are engaged in the construction of residential flats, on the ground that they were rendering "Construction of Residential Complex Service" as per Section 65(30a) of Chapter V of the Finance Act, 1994, applying the extended period of limitation. The Assistant Commissioner, however, did not impose any penalty on the assessees as they had furnished the details of the amount collected, and had paid a bulk of the service tax amount before the issue of the show -cause notice and the balance differential amount of Rs. 11,451 subsequent to the issue of the notice. Penalty proceedings were also dropped for the reason that the service provider had paid the entire interest on the tax demand. The order was revised by the Commissioner of Central Excise who held that since the assessee failed to pay service tax due on the value of taxable service received by him, he was liable to penalty and hence imposed a penalty of Rs. 200 per day in respect of service tax payable during the period from 16 -6 -2005 to 17 -4 -2006 under the provisions of Section 76 of the Finance Act, penalty of 2 per cent per month in respect of the tax payable during the period from 18 -4 -2006 until the date of payment of tax due, under Section 76 , subject to the penalty not exceeding the actual amount of service tax payable, penalty of Rs. 1,000 under Section 77 and penalty of Rs. 3,30,451 under Section 78 of the Act. Hence this appeal by the assessee.

(2.) I have heard both sides. The finding of the adjudicating authority that the assessee was guilty of suppression remains unchallenged. Once suppression is established, penalty is automatically attracted, in the light of the Apex Court decision in Union of India v. Dharamendra Textile Processors, (2008) 17 STT 262. I, therefore, agree with the finding of the Commissioner that penalty is to be imposed, uphold the impugned order and reject the appeal.