2013 (8) TMI 415

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....e 2(1)(d)(v) of the Service Tax Rules, 1994 read with Section 68(2) of the Finance Act, 1994, the respondent was liable to pay service tax on the GTA services qua recipient thereof, w.e.f. 01/01/2005. They ought to have got themselves registered with the Department for that purpose also. However, the respondent failed to obtain such registration nor to file service tax returns or to make service tax payments. On 28/04/2009, a show-cause notice was issued to them demanding service tax for the period from 01/01/2005 to 31/03/2008 with interest thereon and proposing penalties under Sections 76 to 78 of the Finance Act, 1994. As, by that time, the respondent had paid service tax with interest thereon, the show-cause notice proposed to appropria....

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....ervice tax and interest prior to the issuance of the show-cause notice can be a reasonable cause for not imposing a penalty under Section 76 of the Finance Act. The grounds for imposing a penalty under Section 78 and those for imposing one under Section 76 are independent and mutually exclusive. Therefore, according to the learned Superintendent(AR), Section 76 penalty on the respondent cannot be done away with on the facts and circumstances of this case. In this connection, he claims support from the Hon'ble Kerala High Court's judgment in A.C. of Central Excise vs. Krishna Poduval [2006(1) STR 185 (Ker.)]. Reliance is also placed on Quality Welding Works vs. CCE, Ludhiana [2011(21) STR 187 (Tri. Del.)] and Mohammad Mustkeen vs. CCE, Chand....

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....uts to their factory and/or clearing their final products from their factory. Apparently, they suppressed the factum of having availed GTA service for such purpose over a period of time. It was under compulsion by the Department in 2009 that the respondent paid up the tax and interest and took steps for getting registered with the Department. This conduct of the respondent occasioned the issuance of the subject show-cause notice wherein, apart from the proposal to appropriate the above payments towards demand of service tax and interest thereon, the penal provisions of the Act were also invoked. Section 76 was invoked for their failure to pay service tax; Section 77 was invoked for their failure to file service tax returns; Section 78 was i....

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....in the statement dated 13th September, 2005 of Shri Balwinder Singh, Proprietor of the appellant firm, had disclosed about absence of knowledge of law to him. Obviously, the letter dated 24th August 2006 appears to be an afterthought. Even otherwise, as observed above, mere ignorance of law cannot be an excuse. The only reason stated by the party in their reply to the show-cause notice, against imposition of penalty, was that the non-payment of service tax was not wilful. The reason presently stated by their authorized representative is that they were unaware of the relevant legal provisions. It is idiomatic that ignorance of law is no excuse. If that be so, the non-payment of service tax was wilful. No other reason has been stated by the ....