COMMISSIONER OF CENTRAL EXCISE Vs. MANKODI ENTERPRISES

JUDGEMENT

(1.) THIS appeal is filed by Commissioner of Central Excise, Bhopal against the impugned order dropping the penalty imposed on the respondent under Sections 75A, 76,77 and 78 of the Finance Act, 1994.

(2.) THE respondent M/s. Mankodi Enterprises, Jabalpur are Clearing and Forwarding Agent of M/s. Exide Industries Ltd. since 1998 and they were liable to pay tax from 1 -9 -1999 onwards and filed ST -3 return. The respondent took registration of service tax in October, 2003 and filed service tax return. Show cause notice was issued to them demanding service tax and imposing penalty. Show cause notice was adjudicated by the Deputy Commissioner, Central Excise who demanded service tax and imposed various penalties. The Commissioner (Appeals) in the impugned order upheld the levy and payment of service tax but he dropped the penalties imposed under Sections 75A, 76, 77 and 78 on the ground that under Circular F. No. 137/39/2004 -CX. 4, dated 23 -9 -2004, a new Voluntary Disclosure schemes for voluntary disclosure was circulated by the Government, according to which, if service provider makes declaration to the department with regard to the past liability towards service tax and interest payable, the departmental authorities will accept the declaration and on the spot give a registration to the service provider and penal proceedings against the person approaching under this scheme will be completely waived.

(3.) IT was argued for the Revenue that the respondents were required to take out service tax registration from 1999 and were required to file service tax return and pay the service tax regularly. They neither took service tax registration nor filed return nor paid tax during that period till October, 2003. When the department asked them to pay service tax then they took registration and paid service tax and submitted the return in October, 2003. Service tax was paid by them only after adjudication of the proceedings. Therefore, they are not covered by the Voluntary Disclosure scheme and the Commissioner (Appeals) has wrongly dropped the penalties. It was also stated that they do not have bona fide belief that they were not liable to pay tax as they were recovering the amounts from the Exide Industries Limited. There is no provision of waiving penalty under Section 75A. Therefore, the order of the Commissioner (Appeals) waiving the imposition of penalties may be set aside.