TaxTMI 
TaxTMI 
2013 (12) TMI 40
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....ment of Shri G.S. Arora, Managing Director was recorded under Section14 of the Central Excise Act, 1944 read with Section83 of the Finance Act, 1994, wherein he categorically admitted that the appellant firm had deliberately not declared the correct value of security services. In their ST-3 Returns much lesser value was declared on which the appellant paid the tax. After the commencement of the investigation, the appellant firm paid a sum of Rs.87,91,156/- towards the Service Tax liability. On completion of the investigation, a show-cause notice dated 13.7.2006 was issued to the appellant demanding the Service Tax of Rs.1,46,88,455/-for the period April, 2001 to March,2006 as detailed in Annexure-A to the notice along with interest thereon. The show-cause notice also proposed to appropriate the amount of Rs. 1,12,13,143/- deposited by the appellant towards part payment of the Service Tax liabilities and also an amount of Rs. 8,21,356/- deposited by them towards interest on delayed payment of Service Tax. The sad notice was adjudicated vide the impugned order wherein the Service Tax demand of Rs.1,46,88,455/- was confirmed along with interest thereon and the amounts already deposite....
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....er Section 76 and 78 ought to have imposed on the appellant, even for the period prior to 16.5.2008 in view of the decisions of this Tribunal in the case of CCE vs. Green Line Housing Finvest Ltd., CCE Vs.Mittal Tenopack P. Ltd. and the decision of the Hon'ble High Court of Punjab & Haryana in the case of CCE Vs. First Flight Courier Ltd.. Penalty under Section 78 is not imposable on the appellant inasmuch as the appellant had made periodical payments towards Service Tax liability during the continuancy of investigation and when the tax stood paid before the issue of show-cause notice, no penalty under Sections 76, 77 and 78 should have been imposed and relies on the decisions of this Tribunal reported in, and. (iv) It is further contended that imposition of penalty on the Managing Director under Section 78 of the Finance Act, 1994 is impermissible in law, inasmuch as the said section for levy of penalty on the 'person liable to pay Service Tax' and no personal penalty can be imposed under this provision on any Director/employee of the assessee. (v) It is also argued that option to pay 25% of the penalty was not given by the adjudicating authority, w....
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....same is reproduced below:- "[1] Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within eighteen months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-secti....
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....der sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount." While Section 73 deals with short-levy or short-payment, non-levy or non-payment or erroneous refund. Section 73A deals with payment of tax collected to the credit of the Central Govt. There is substantial difference between the two provisions. Under Section73, the demand can be made only when the services rendered is a taxable service under Section 65 (105) and the value of taxable service is to be determined under Section 67 read with the Valuation Rules and on the value so determined, the tax liability has to be discharged. In other words, Section 73 provides for assessment of tax and thereafter, payment of tax. Demand under Section 73A does not require any asses....
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....riod of time and short-levy or short-payment or non-levy or non-payment or erroneous refund is on account of fraud or collusion or willful mis-statement and suppression of facts and contravention of any of the provisions to chapter V of the Finance Act, 1994 or to the rules made thereunder, with an intent to evade payment of Service Tax. In the present case, the appellant had suppressed the value of the taxable service received by them in their ST-3 Returns and in respect of the year 2004-05 and 2005-06, the appellant did not file any return at all. It has also been admitted in the statements recorded under Section 14 of the Central Excise Act by the Managing Director of the appellant firm that they mis-declared the value so as to evade payment of Service Tax. Statements recorded under Section 14 is a valid piece of evidence under the Evidence Act as held by the Constitution Bench of the Hon'ble Apex Court in the case of Ramesh Chandra Mehta Vs. State of West Bengal - 1999 (110) ELT 324 (SC) and, therefore, the suppression of facts is clearly established in the present case. Therefore, imposition of penalty under Section 78 on the appellant is in accordance with law. However, for t....
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.... it is for the assessee to avail the incentive by paying the duty, interest and 25% of the penalty within the time stipulated under the section. If the assessee fails to fulfill the conditions set out in the first and the second proviso to Section 11AC within the time stipulated therein, then, the incentive is lost and the assessee is required to pay penalty at 100%. Therefore, in the absence of any obligation cast upon the Central Excise Officer under Section 11AC to determine penalty at 25%, the argument that if the Central Excise Officer fails to determine 25% penalty, the appellate authority can determine 25% penalty and permit the assessee to pay penalty within thirty days from the date of communication of the order passed by the appellate authority cannot be accepted. 23) The fact that this Court in the case of Viraj Alloys Limited (supra) as also various High Courts and even the CBDT have directed the adjudicating authorities to make it explicitly clear in the operative part of the adjudication order regarding the availability of paying 25% penalty in the circumstances set out in the first and the second proviso to Section 11AC, does not mean that the statue ....
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....e authority nor any other authority to permit the assessee to pay 25% penalty at any time other than the time prescribed under Section 11AC. 26) By comparing Section 11AB with Section 11A(2B) and (2C) and also by referring to Section 11AC as substituted with effect from 8th April, 2011, it was contended by the counsel for the assessee that it was never the intention of the legislature to levy 100% penalty under Section 11AC. We see no merit in the above contention because, firstly sub-section 2B and 2C to Section 11A are applicable to cases not involving fraud, collusion, suppression of facts etc, whereas Section 11AC applies to cases where there is intention to evade payment of duty on account of fraud, collusion or any willful misstatement or suppression of facts etc. Secondly, to attract Section 11AC criminal intent or mens rea is a necessary constituent, where as, under Section 11A, the criminal intent or mens rea is not the necessary constituent. Therefore, the provisions of Section 11AC cannot be interpreted with reference to the provisions contained in Section 11A of the 1944 Act. Similarly, the Section 11AC as substituted with effect from 8th April 2011 does....