SANGHI INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) AFTER dispensing with the condition of pre -deposit of penalty of Rs. 67,400/ - imposed in one case and Rs. 1,01,100/ - in another case, under Section 76 of Finance Act, 1994, and penalties imposed under Section 77 of Finance Act, 1994, inasmuch as the appellants have deposited the entire Service Tax of Rs. 59.59 lakhs approx. in one case and Rs. 99.93 lakhs approx. in another case, I proceed to decide the appeal itself.

(2.) THE said service tax stand confirmed against the appellant in respect of GTA services availed by them during the period January 2005 to September 2005. Though the appellants got themselves registered for payment of service tax on 30.01.05, it is their contention that the issue is as to who has to pay the service tax i.e. whether the GTA service provider or GTA service recipient, was not clear from doubt. As such, imposition of penalty upon them was not justified. For the above proposition, the learned advocate has drawn my attention to CBEC Circular No. 18/2004 -TRU, dt. 17.12.04. In Para 5.6 of the said Circular, it stand clarified that in case of omission in payment of service tax, committed before 31.12.05, the consequences should be limited to recovery of tax with interest payable thereon. No penalty should be imposed on such defaulter unless the default is on account of deliberate fraud, collusion, suppression of facts with an intent to evade payment of duty of Service Tax. Learned advocate also draws my attention to Tribunal's decision in case of Alstom Projects India Ltd. v. CCE Coimbatore : 2008 (12) STR 23 (Tri -Chennai). Keeping in view the above circular which was held binding on the Revenue, penalty under Section 76 of the Act was set aside. He also drawn my attention to observations made by the Commissioner in not imposing penalty under Section 78 which has not been taken into account by him for imposing penalty under Section 76 and Section 77.

(3.) AFTER appreciating the submissions made by both sides, I note that apart from the Board's circular and Tribunal's judgment referred supra, the Commissioner has himself extended the benefit to the appellant while not imposing penalty under Section 78. For better appreciation, I reproduce Para 12.3 and 12.4 of the Commissioner's order.