2024 (10) TMI 1347

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....isions of section 75 of the Finance act, 1994 as amended from time to time. This amount is held to be recoverable from the party. 2. I do not impose any penalty by invoking Section 80 of the Finance Act, 1994." 2.1 Appellant is registered as service provider mainly to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco Industries Ltd. as service recipient, it was observed that appellant was providing taxable services under the category of Cargo Handling Services, Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient since April 2005. However, they have not discharged the service tax due in respect of these services. 2.3 After completion of investigation and inquiry, a show cause notice dated 11.10.2010 was issued to the appellant asking them to show cause as to why:- "1. The service tax amounting to Rs. Rs. 11,40,046/- (Service Tax Rs. 11,10,933/- + Education Cess Rs. 22,219/- + Secondary & Higher Education Cess Rs. 6,894/-) should not be demanded and recovered from them alongwith appropriate Interest under the proviso to Secti....

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....   98,68,990.55 Service Tax   10,16,506..03 Less service tax already paid as per SCN   30,200 Net tax payable   9,86,306.03 That the party submitted that he is a petty contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return thereafter on regular basis. That the party is ready to deposit the service tax, due as per the chart for calculation of tax submitted with the reply, along with interest. In view of the submissions party prays for waiver of penalty. At the time of personal hearing Shri Ram Kesh Paswan, Proprietor of the firm appeared before me on 13.05.2011 and stated that they are willing to deposit the tax as per calculation chart. They were innocent and ready to pay the tax due upon them. They are regularly paying the service tax after obtaining the service tax registration and furnishing the returns to the dep....

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....area. It is also obvious that the party is ready to deposit the due service Tax In my perception Service Tax was not deposited due to unawareness only, which may be taken as reasonable cause for failure of deposit of the Service Tax. Therefore, I am not inclined to impose any penalty as proposed in the Show Cause Notice by invoking Section 80 of the Finance Act, 1994. There are plethora of cases where the penalties have been waived on the basis of ignorance of the party. In case of Magnum International vs. Commissioner of Customs & Central Excise Bhopal (Final order No ST/57-58/2008-PB, dated 03-04-2008) on the one hand invocation of extended period was justified covering the extended period demand , and on the other hand penalty was waived on the basis of reasonable cause for failure to discharge the Tax liability It has been observed by the Hon'ble CESTAT in the case of CCE vs. Busy Bee (2009) 18 STT 18 392 (CESTAT) that if nonpayment was due to ignorance of law, penalty is not imposable." 4.4 From the above it is clear that appellant do not dispute the liability to pay the service tax and has in fact admitted the liability to pay the service tax....

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....Therefore, the appellant's contention has no strength. 7. On further going through the facts of the case and the material available on record, I find that it is an admitted fact that the appellants did not contest the Show Cause Notice dated 22.10.2010 on merits. I find that the adjudicating authority in this regard has held as under - "The party has submitted in their defence reply that they are ready to deposit the service tax, due as per the chart for calculation of tax submitted with reply. Further, they have requested that being ready to pay the tax and being innocent, penalty may please be dropped. I have gone through records of the case as well as submissions of the party. The party is not contesting that they were engaged in providing of taxable services as discussed in the show cause notice. They disputed only on the quantification aspect, as they have submitted a different chart regarding due of the taxable liability." I find that the appellants have neither contested nor controverted the aforesaid finding On the other hand, have admitted the aforesaid observations in Para 2.2.1 of their present Memorandum of Appeal wherein, they ha....