TaxTMI 
TaxTMI 
2023 (10) TMI 59
X X X X Extracts X X X X
X X X X Extracts X X X X
....tax for the period from February 2009 to December 2009. The verification culminated into issue of Show Cause Notice dated 1.3.2012 by the ADG, DGCEI, Chennai demanding service tax of Rs. 4,15,36,896/- on Storage and Warehousing Service and GTA service for the period from February 2009 to December 2009 besides demanding interest and imposition of penalty. After due process of law, the Commissioner of Service Tax vide the impugned order confirmed the duty demanded along with interest and imposed penalties. Aggrieved by the said order, the appellant is before this Tribunal assailing the findings and order. 3. No cross-objection has been filed by respondent-department. 4. We have heard Smt. Radhika Chandrasekar, learned counsel for the appellant and Shri M. Ambe, learned Deputy Commissioner (AR) for the respondent-department. 4.1 The learned counsel for the appellant submitted that the appellant is engaged in providing service under the category of storage and warehousing services. The Appellant had not discharged service tax for the period February 2009 to December 2009 due to financial constraints. On being pointed out by the department about nonpayment of service tax, they ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the order of the Tribunal would reveal that 'reasonable cause' as provided under Section 80 of the Act has been recorded by the Tribunal, therefore, it rightly went on to invoke the provisions of Section 80 of the Act on the ground of reasonable cause. She referred to various judgments of courts / Tribunal in support of their stand and prayed that the penalties imposed may be set aside. 4.2 The learned AR for the department has stated that although the appellant had claimed to have paid an amount of Rs 2,18,47,630/- in cash and Rs 1,96,89,265/-by way of CENVAT credit towards duty due after the visit of DGCEI officers and before issue of SCN, on scrutiny of the payments it was noticed by the Original Authority at para 6.1 of the impugned order that the actual Cenvat credit debited was only Rs 1,85,44,015/-. Further an amount of Rs 4,05,781/- of credit availed by the appellant was not found eligible as the service had not been received by the appellant. Hence the actual amount of credit eligible for appropriation was only Rs 1,81,38,234/- as against Rs. 1,96,89,265/- claimed to have been paid by the appellant. He further reiterated the points given in the impugned order....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was actually debited as discussed at para 6.1 of the impugned order. This has also not been disputed by the appellant. This only goes to show that the scrutiny of payments claimed by the appellant is a part of the quasi-judicial process involved in the passing of the order in original and any discrepancies noticed and pointed out cannot be faulted. We do not find any reason to interfere with the impugned order in this regard. 7. The next issue raised by the appellant is that as per Section 73(3) of the Finance Act 1994, if tax is paid along with interest before the issuance of show-cause notice, then in that case show-cause notice shall not be issued. Before taking up the issue it is necessary to reproduce the relevant portions of section 73 ibid, as it then stood. Section 73 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded . . . . (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, charge....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... seek protection under section 73 (3). The appellant has further referred to Boards letter F. No. 137/167/2006-CX4, Dated 3-10-2007, which is reproduced below. Section 73(1A) of the Finance Act, 1994 provides for conclusion of adjudication proceeding in the cases of wilful suppression/ fraud / collusion if the taxpayer pays service tax liability along with interest and a penalty equal to 25% of service tax amount, within a period of one month from the date of issue of SCNs. Similarly, section 73(3) provides conclusion of adjudication proceedings in other cases on payment of service tax and interest. 2. A question has been raised as to whether the conclusion of proceedings in such cases is limited to the action taken under section 73 of the Act or all proceedings under the Finance Act, 1994, including those under sections 76, 77 and 78, get concluded. 3. The issue has been examined. The intention of section 73(1A) has already been explained vide para 8(g) of the post budget instructions issued by TRU vide D.O.F. No. 334/4/2006-TRU, dated 28-2-2006, wherein it has been clarified that this sub-section provides for conclusion of adjudication proceedings in re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce payment along with interest is made before issuance of show cause notice, in such cases no show cause notice could be issued for imposition of penalty. We find that none of the cases above are covered by the provisions of section 73(4) and are hence distinguished and are not applicable to the facts of this case. 8. The final submission made by the appellant is that in terms of section 80, penalty cannot be imposed under section 76, 77 and 78 if the Assessee proves that there was a reasonable cause for the said failure. The Appellant had not discharged service tax for the period February 2009 to December 2009 due to financial constraints. Section 80 is extracted below: Section 80. Penalty not to be imposed in certain cases (1) Notwithstanding anything contained in the provisions of section 76, or section 77, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. (2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 08/07/2010 and October 2009 to March 2020 on 02/11/2010 i.e. only after the investigation initiated by officers of DGCEI, Chennai. In fact, if they genuinely faced a financial constraint and could not pay their dues, they should have declared the tax dues not paid in column 4C of the ST-3 Return and filed it on time. The ST-3 Return has the columns to show the cash/CENVAT credit balance lying with them and the tax due but not paid. Suppressing these facts by not filing their Returns, even after having collected the tax from their customers, is a clear case of suppression of vital information with intention to evade payment of duty. e) They had a cenvat credit balance of Rs 1,81,38,234/- but did not use it to pay long outstanding tax dues, although they could not have used it to settle other outstanding payments to third parties, if any. Clubbing this with their non-filing of ST-3 Returns clearly shows their intention to evade payment of duty. f) Once the officers visited their unit and discovered the evasion of duty, they have immediately cleared all the tax dues. They did not face any financial constraint in doing so. For these reasons we find that the appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nefit of Section 80 is not deniable even when extended period of limitation is invoked for demand of duty. This judgement pertains to a case where the Adjudicating Authority was of the view that the issue involved interpretation of legal provisions which has resulted in the non-payment of service tax in time. The facts are distinguished. In Gazi Saduddin v. State of Maharashtra and Another [(2003) 7 SCC 330] the Hon'ble Supreme Court held as under: "Primarily, the satisfaction has to be of the authority passing the order. If the satisfaction recorded by the authority is objective and is based on the material on record then the courts would not interfere with the order passed by the authority only because another view possibly can be taken. Such satisfaction of the authority can be interfered with only if the satisfaction recorded is either demonstratively perverse based on no evidence, misreading of evidence or which a reasonable person could not form or that the person concerned was not given due opportunity resulting in prejudicing his rights under the Act." C) CCE, Guntur vs. Narasaraopet Municipality (2015) 39 STR 800 (A.P.) and Commissioner of Central Excise ....