TaxTMI 
TaxTMI 
2019 (7) TMI 115
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....rvice tax amounting to Rs. 90,35,823 as short paid during the period 2004-05 to 2008-09is demanded on M/s Tops Security Ltd, Flat No 2/9, Block B, Tara Apartment Sidhgora Bagan Area Jamshedpur 831009 and they are directed to pay the same under proviso to Section 73(1) of the Finance Act, 194. On making the payment as ordered above, M/s Tops Security Ltd shall submit proof of such payment. Before the jurisdictional Divisional officer who on receipt of such information shall determine the interest amount payable by M/s Tops Security Ltd and shall intimate the amount of interest payable by M/s Tops Security Ltd. M 2. A penalty of Rs. 1 crore (Rupees One Crore) is imposed upon M/s Tops Security Ltd under Section 76 of the Finance Act, 1994; and 3. Penalty of Rs. 200 per day delay in payment of service tax short paid or submission of ST-3 Returns whichever is later is imposed under section 77 ibid." 1.3 By his order Commissioner Bhubaneswar held as follows: "In view of my findings, I order as under- 5.1 I confirm Service Tax of Rs. 58,03,816/- (Rupees Fifty Lakhs Three Thousand Eight Hundred and Sixteen only) on ....
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....heir registered office. • After 2005-06 the compliance by way of making deposit of service tax got delayed due to rotation of funds. • After investigations conducted by the DGCEI they are depositing the service tax. 2.3 After completion of investigations it was determined that outstanding tax payable by the appellant in Jamshedpur branch and Bhubaneswar branch is as indicated in table below: Year Taxable Vale Amount Payable Amount Paid Amount Outstand ing At Beginning For Year Total Jamshedpur Branch 04-05 5032343 0 714905 714905 217753 497152 05-06 4071646 497152 437601 934753 0 934753 06-07 12291566 934753 1504488 2439241 0 2439241 07-08 23871947 2439241 2949558 5388799 752609 4636190 08-09 36162759 4636190 4399634 9035824 0 9035824 Total 81430261 10006086 970362 Bhubaneswar Branch 04-05 7119102 37758 939848 977606 473924 503682 05-06 6793189 503682 383622 887304 334886 552418 06-07 1022....
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....e matter transferred from Kolkata Bench to Mumbai Bench of Tribunal. (Refer Order No MO/75627-75628/2018 dated 04.05.2018 of the Kolkata Bench). Accordingly these appeals got transferred to Mumbai Bench and were listed before us. 3.1 We have heard Shri Om Prakash Bihari, Chartered Accountant for the Appellant and Shri M Suresh joint Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellants learned Chartered Accountant submitted - A. Jamshedpur Branch • They do not dispute the demand of service tax on merits but there are certain computational error in determination of demand as indicated in table below: Year Service Tax including Edu Cess and SHE Cess payable As per SCN/OIO As per Actual and Rate prescribed Taxable Value Amount Rate (%) Taxable Value Rate (%) Amount 04-05 5032343 714905 14.2 1 5032343 10.2 465789 05-06 4071646 437601 10.7 5 4071646 10.2 376867 06-07 12291566 1504488 12.2 4 12291566 12....
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....08 573400 2 05.11.2008 421313 3 08.12.2008 520141 4 11.12.2008 486417 5 06.01.2009 374013 6 06.01.2009 680438 7 04.03.2009 602194 8 11.03.2009 89079 9 30.10.2009 51052 10 30.03.2010 68775 Total 3866822 • They had paid a sum of Rs. 19,26,084/- on 20th October 2009 on the Challans bearing registration No of Kolkata Branch (AAACT0160FST014) inadvertently by mistake, for the invoices issued for the Bhubaneswar Customers. • Apart from the above payments made they had also paid interest amounting to Rs. 7,90,940/- • If all the above payments made by them as detailed above is taken into account then they have discharged the entire service tax liability along with the interest before the adjudication of the matter. • Out of the above amounts paid by them Commissioner has agreed to the payment of Rs. 37,47,040/- towards Service tax and Rs. 5,74,285/ -towards interest and has appropriated the same towards the service tax demanded from them. • Since the Appellants had taken the registration of Bhubaneswar Branch on 2nd September 2....
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....d in 2016 (41) S.T.R. 634 (Tri. - Del.). • He also relied upon the Decision of Delhi High Court, wherein the High Court has not only upheld the imposition of mandatory penalty upon the Appellant, but has held that tribunal could not have allowed the option of payment of 25% of the mandatory penalty, as has been allowed by tribunal in the above referred decision [2016 (41) S.T.R. 612 (Del.)]. • He argued for dismissal of all the appeals. 4.1 We have considered the submissions made by both the Appellants and revenue. Undisputed fact is that Appellants are registered providers of taxable service under the category of "Security Agency Services." During the period under dispute, appellant were raising the invoices on their customers/ clients for the services rendered along with the applicable taxes. They were receiving the payments inclusive of the service tax amount but were not depositing the same. They were also not filing the ST-3 returns regularly as required by the Finance Act, 1994 read along with the Service Tax Rules, 1994. The plea advanced by the appellants for not depositing the tax is on account of financial hardship. If such plea is....
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....-TIOL-1124-HC-Ahd-CX = 2013 (296) E.L.T. 327 (Guj.) has held as under : "At no stage, either in the Order-in-Original or in the order of Commissioner (Appeals), the assessee respondent has been given the benefit of payment of reduced penalty - Court has followed a consistent view that the assessee is required to be given the option by the adjudicating authority where he is asked to pay a duty demand with interest and 25% of penalty within 30 days from the date of adjudication of the order and in such case, he would be liable to pay only 25% of the penalty - whenever such option had not been given, the remand had been made to the concerned authorities and the period of 30 days is being considered, if in case option is not given earlier, from the date of availing such option - since no option was given, the Tribunal can award such an option to the assessee." 7. In the light of the foregoing, we do not find any merit in the appeals except to the extent that the benefit of 25% of mandatory equal penalty under Section 78 ibid is required to be extended to the appellants. Accordingly the appeals Nos. ST/55809/2013 and ST/55810/2013 relating to Show Cause Notices dated 10-4-2011 and....
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....e was nothing erroneous in an order of the CESTAT extending such benefit at the appellate stage to the assessee and permitting the assessee to pay the reduced within 30 days of the order of the CESTAT. 20. The Gujarat High Court at this stage took note only of, and chose to follow, its earlier decisions in CCE v. Akash Fashion Prints Pvt. Ltd. - 2009 (239) E.L.T. 439 (Guj.) and CCE v. M/s. Krishnaram Dyeing & Finishing Works - 2013 (298) E.L.T. 376 (Guj.). Soon thereafter it again dealt with the issue in Commissioner of Central Excise v. Rajeshree Dyeing & Printing Mills (P) Ltd. - 2014 (305) E.L.T. 442 (Guj.). This time the Gujarat High Court took note also of the decisions of this Court and of the Bombay High Court noted hereinbefore and of the Allahabad High Court in Commissioner of Customs and Central Excise v. Majestic Auto Ltd. - 2013 (289) E.L.T. 95 (All.) and held that the interpretation of Section 11AC of the CE Act in its true spirit contemplates payment of the reduced penalty within 30 days of the communication of the order of the adjudicating authority. It also noted that "this being the provision embedded in the statute itself, nobody can be permitted to....
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.... the service tax liability or even when it wishes to contest such liability, but is prepared to pay upfront the service tax and interest without prejudice to its rights and contentions, the statute provides an option of payment of reduced penalty to the extent of 25% of the service tax. This is, of course, subject to payment of not only the service tax and interest but also the reduced penalty within 30 days of the "communication of the order" of the adjudicating authority. 24. The SCN issued to an assessee invariably mentions the statutory provisions under which the demand for service tax, interest and penalty is proposed to be raised. There can be no question, therefore, of the assessee being unaware of the provisions of the statute. It is also very likely that in the adjudication proceedings the assessee, who invariably has an authorised representative to put across its case to the adjudicating authority, will make a reference to the statutory provisions. In particular if the submission relates to penalty it is unlikely that an assessee will not even refer to the relevant statutory provisions. The question of an Assessee, therefore, pleading ignorance of the law g....
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....date of the impugned order of the CESTAT. Such a direction was contrary to the third proviso to Section 78(1) of the Finance Act, 1994 and therefore legally unsustainable." Following the above decisions we have ourselves in case of Appellant various Branches decided the matter against the appellant upholding the demand of service tax and interest along with penalties as reported at [2018-TIOL-3253-CESTAT-Mum] 4.3 In view on the merits of case demanding the Service tax with interest and penalties imposed we do not find any merits in the appeals filed by the appellant. While appellants do not dispute the computation of tax demand in case of Bhubaneswar Branch, they have pointed out to certain computational errors as indicated in para 3.2 (Instead of total tax payable as per SCN/OIO of Rs. 1,00,06,186/- tax payable should have been Rs. 88,60, 900/-). Taking the note of this submission we direct the adjudicating authority to recomputed the amount of demand after taking into account the submissions made by the appellants in this regard. Appellant have also contended and produced certain tax payment documents which have been taken on record. We do not record any f....
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....ioner of Central Excise, Visakhapatnam - 2003 (161) E.L.T. 285 (Tri.-Bang.), relied upon by learned Counsel for assessee, which view was confirmed by the Hon'ble the Apex Court while dismissing the appeal of the department, that in case the duty is paid before issuance of show cause notice, no penalty u/s. 11AC is imposable, was a decision of the Tribunal at Bangalore dated 13-11-2002. Taking into consideration the hierarchy of authorities under the Central Excise Act, 1944 i.e. Assessment Officer conducting enquiry and determining the duty evaded or short paid, Commissioner (Appeals) and thereafter CESTAT, it can safely be said that this was a decision regarding the non-payment of duty of the period prior to insertions by Amendment Act No. 14/2001 with effect from 11-5-2001 by which sub-sections (2A), (2B) and (2C) are inserted in the main Act. Naturally, the Explanation (1) to sub-section (2B), reproduced hereinabove, was neither on the statute book nor was under consideration before the Tribunal or before the Hon'ble the Supreme Court. If the effect of Explanation is taken into consideration, the liberty to pay evaded excise duty as may be ascertained by Central Excise Officer u....
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....tion, if at all the same is incorporated in such notification in the gazette by which rates of interest chargeable u/s. 11AB are declared. The second aspect would be whether there is any discretion not to charge the interest u/s. 11AB at all and we are afraid, language of Section 11AB is unambiguous. The person, who is liable to pay duty short levied/short paid/non-levied/unpaid etc., is liable to pay interest at the rate as may be determined by the Central Government from time to time. This is evident from the opening part of sub-section (1) of Section 11, which runs thus : "Where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person, who is liable to pay duty as determined under sub-section (2) or has paid the duty under sub-section (2B) of Section 11A, shall in addition to the duty be liable to pay interest at such rate ........" The terminal part in the quotation above, which is couched with the words "shall" and "be liable" clearly indicates that there is no option. As discussed earlier, this is a civil liability of the assessee, who has retained the amount of public exchequer with himself and which o....
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....tinction between Sections 11AB and 11AC by virtue of sub-section (2B) and Explanations below the same. Second explanation below sub-section (2B) reads thus : "Explanation (2) : For the removal of doubts, it is hereby declared that the interest u/s. 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of duty if any as may be determined by the Central Excise Officer, but for this sub-section." It is evident that explanation has taken care to charge the interest on the difference amount if the amount of duty payable as ascertained by the assessee and the amount of duty payable as ascertained by the Central Excise Officer, is different. Thus, even if the assessee pays the short duty by virtue of liberty granted by sub-section (2B) of Section 11A, he is liable to pay interest, on the same even if the amount is paid, and he is liable to further interest also on the amount of short duty as ascertained by the department if that exceeds the self-assessment and to that extent. By this explanation, we are convinced that even if no notice is issued by the department because it agrees with the amount of short duty paid by t....
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....ection (2B) reading "but for this sub-section". According to him, "but" is a conjunction used to indicate the intention of those who use it to limit or restrain the sense or effect of something, which had before been said. He has obtained this meaning from Law Lexicon by P. Ramnatha Aiyar. In order to examine the submission by learned Counsel as to whether this terminal part of Explanation (2) gives the explanation so much strength as to mean that the party, which has utilised the facility of sub-section (2B) of payment of short duty as ascertained by the assessee himself, is not liable to pay the interest as u/s. 11AB, we have tried to search for the meaning of phrase "but for". As per Concise Oxford Dictionary, 11th Edition, "but for" means "except for", "if it were not for". In view of these meanings obtained from the Law Lexicon and the Oxford Dictionary attached to the word "but" and to the phrase "but for", the Advocate pleaded that it should be interpreted that had sub-section (2B) not been in existence or rather the facility to pay the short duty was not available, the party would have been required to pay interest u/s. 11AB and if the facility is available, on compliance o....
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....AB together with Section 11A (2B) and Explanation (2), we are unable to accede to the interpretation tried to be attributed by Advocate Shri A.P. Kolte to Explanation in question. 13. For all these reasons discussed, we are unable to agree with the proposition that interest u/s. 11AB is also not chargeable in case the short duty or unpaid duty is deposited with the Government before issuance of show cause notice." Hence the pleas raised by the appellants in these respect need to be rejected. However we find that in the case of Jamshedpur Branch, the penalty imposed under Section 78 is higher than the demand of tax. Such an approach is contrary to the provisions of Section itself. However since the matter in respect of Jamshedpur Branch is remitted back to the original authority for re-computation of tax payable, the authority shall reconsider the quantum of penalty and make it equal to the tax demand. 4.6 Appellants have claimed that penalties in their case should be waived of by invoking section 80 of Finance Act, 1994. We do not find any merits in the request made. This tribunal has in case of International Security Academy P Ltd Vs CCE Chennai [2006 (1) STR 289 (T-Chenn....