INDSUR GLOBAL LIMITED Vs. CCE&ST

JUDGEMENT

(1.) THIS appeal has been filed by the appellant against OIA No. PJ/126/VDR -II/2013 -14 dated 27/5/2013 under which the first appellate authority has upheld the OIO dated 27/3/2012 passed by the adjudicating authority. An amount of Rs 10,14,937/ - alongwith interest, was confirmed by the adjudicating authority with respect to Business Auxiliary Service provided by the appellant. The amounts already paid by the appellant were appropriated and penalties under section 77(i)(a), 77(i)(b), 77(2) and section 78 of the Finance Act 1994 were also imposed by the Adjudicating authority. In the present appeal, appellant is not disputing the duty liability with respect to Business Auxiliary Service provided but has agitated that penalties imposed upon the appellant are not attracted by virtue of Section 80 of the Finance Act 1994.

(2.) SHRI Sarju Mehta (Chartered Accountant), appearing on behalf of the appellant submitted that the present appellant has been mainly undertaking manufacturing activity for which huge amounts of Central Excise Duties are paid. The service provided under Business Auxiliary Service ' by the Head Quarters of the appellant is a very minor commercial activity undertaken by the appellant. That all the payments relating to the service provided were received through cheque and duly reflected in the books of accounts maintained by the appellant. That as soon as the short payment was brought to the knowledge the same was paid when documents relating to M/s Ratnamani Metals and Tubes Ltd were brought to their notice. It was his case that the statements of the appellant were recorded regarding providing of Business Auxiliary Service and the differential amount of service tax was immediately paid in the month of July 2010. It was argued by the Ld. CA that there was a reasonable cause for not making the payment and therefore penalties imposed should be waived as per the provision of Section 80 of the Finance Act 1994.

(3.) HEARD both sides and perused the case records. The issue involved in this appeal is whether penalties imposed upon the appellant could be waived as per provisions of Section 80 of the Finance Act 1994. It is observed from the facts stated in Para 3, 4 and 5 of the OIO dated 27/3/2012 passed by the adjudicating authority that audit officers of the Dept. gave intimation dated 6/5/2009 to the appellant and called for certain information. Even after follow up by the Dept Officers, appellant did not provide the relevant details for almost one month. The case was subsequently taken over by the HQ (Preventive) and several summons were also issued to the appellant for submitting complete details of the Business Auxiliary Service provided to M/s Ratnamani Metals and Tubes Ltd during the year 2008 -09. Only on receipt of such letter, the appellant started discharging their service tax liabilities under Business Auxiliary Service in the month of July 2010 through GAR -7 challans. It is also evident from the facts stated in Para 12 of the OIO dated 27/3/2012 that service tax for the Business Auxiliary Service provided to M/s Ratnamani Metals and Tubes Ltd were recovered in the invoices and appellant was aware of that fact. However, while filing ST -3 returns for the relevant period, service tax payment for these services was shown as Nil by the appellant. From the available case records and the arguments made by the appellant, no reasonable cause has been shown by the appellant to bring out as to what what prevented them from making payment of service tax when the same has been recovered from the service recipient in the invoices. Therefore, in the present set of facts and circumstances, it is held that the benefit of Section 80 of the Finance Act 1994 cannot be extended to the appellant.