COMMISSIONER OF CENTRAL EXCISE Vs. KULDEEP SINGH GILL

JUDGEMENT

(1.) The matrix of the facts, culminating in the commencement of, relevant for disposal of present appeal filed by the revenue and emanating from the record, is that the respondent-firm M/s Kuldeep Singh Gill was dealing in transport business. It provided the transport service to M/s Indian Oil Corporation, Suchipind, Jalandhar (for short 'IOC') during the relevant period. The revenue claimed that since the respondentfirm provided the taxable transport service under the category 'Rent-a-Cab' to IOC, so, it was liable to pay service tax, was required to be registered and to file half yearly returns with the authorities under Sections 69 and 70 of the Finance Act, 1994 (hereinafter to be referred as 'the Act'). Since the respondent-firm neither applied for registration nor paid the service tax nor filed the returns, so, a show cause notice was issued to the respondent, as to why the service tax amounting to Rs. 93,425/- alongwith interest be not recovered and penalty be not imposed in this relevant connection.

(2.) In the wake of show cause notice, the respondent filed the reply, interalia, explaining that the vehicles were hired from the market for providing services to IOC. The Freight of the hired vehicles was paid to the owner of the vehicle for each fortnightly basis regularly. It was claimed that as the department did not impose service tax on this job in the past, therefore, the respondent-firm was not aware of such a tax liability. The respondent has also claimed that the firm was not in a good financial position to pay the amount of service tax and payment of first instalment would disturb whole of its business. Although the liability to pay service tax was denied, however, it was prayed that in any event, lenient view be taken against the respondent.

(3.) The explanation submitted by the respondent did not find much favour with the revenue and the Adjudicating Authority imposed a penalty of Rs. 93,425/- under Section 70 for contravention of the provisions of the Act. The respondent-firm was also directed to be registered with the Service Tax Authority and to deposit the service tax along with interest at the rate of 24% per annum on the delayed payment of service tax till the final deposit and comply with all the provisions of the Act/Rules, vide order dated 31.12.2001 (Annexure A1).