COMMISSIONER Vs. WELSPUN GUJARAT STHAL ROHREN LTD.

JUDGEMENT

(1.) This is an appeal at the instance of the Department against the order dated 03.02.2012 passed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), wherein the following two questions have been proposed for consideration by this Court:

(2.) The assessee contested the show cause notice. However, the Commissioner confirmed the demand of service tax to the tune of Rs. 3,91,89,370/- under section 73(1) of the Act and also imposed penalties under sections 76, 77 and 78 thereof. The assessee carried the matter in appeal before the Tribunal. During the course of hearing, the learned counsel for the assessee stated that the assessee does not dispute the demand of service tax and interest. The Tribunal, after considering the submissions advanced by the respective parties, was of the view that the assessee had shown reasonable cause for the failure referred to under the said provisions as contemplated under section 80 of the Act and set aside the penalties.

(3.) Mr. Darshan Parikh, learned Senior Standing Counsel for the appellant, assailed the impugned order by submitting that the provisions of section 80 of the Act can be invoked only if the assessee proves that there was reasonable cause for such failure. In the present case the assessee had not disputed the service tax liability and interest in respect of the intellectual property services availed by it and had failed to show reasonable cause for not getting itself registered in this regard and in not paying the service tax payable on such services. Under the circumstances, the assessee had failed to discharge the onus that lay on it, viz. to make out reasonable cause for such failure. Therefore, the assessee was not entitled to the benefit of section 80 of the Act. It was submitted that the respondent-assessee is a large corporate establishment with a huge turnover and as such, it cannot be presumed that such a large establishment can have a bona fide belief which can be termed as a reasonable cause for failure to discharge their service ax liability. It was, accordingly, urged that the Tribunal was not justified in holding that reasonable cause has been shown by the assessee for the purpose of setting aside the penalties.