At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad
By, THE HONORABLE JUSTICE: DR. D.M. MISRA
For Petitioner: M.H. Sukheja, Advocate And For Respondents: L. Patra, Authorised Representative
1. Heard both sides.
2. These two appeals are filed against OIA-SRP/174/DMN/2012-13 28/12/2012, and OIA-SRP/176/DMN/2012-13 dated 28/12/2012 dated passed by Commissioner (Appeals) of Central Excise, Customs and Service Tax-Daman, where under the Ld. Commissioner (Appeals) has confirmed penalty both under Section 76 & 78 of the Finance Act, 1994.
3. Ld. Advocate Shri M.H. Sukheja for the appellant submits that penalties simultaneously under section 76 and 78 of Finance Act, 1994 cannot be imposed in view of the Judgement of the Hon'ble Gujarat High Court in the case of Raval Trading Company v. Commissioner of Service Tax : 2016 (42) STR 210 (Guj.). Further, he argues that since there was no suppression of fact, therefore, imposition of penalty under Section 78 of the Finance Act is untenable in law. It is his contention that entire amount of service tax alongwith interest had been paid prior to issuance of the SCN, therefore, the penalty against them be set aside. Further, the Ld. Advocate submitted that in any case the benefit of discharging 25% of the penalty imposed under Section 78 has not been extended by the authorities below.
4. Ld. AR for the Revenue on the other hand submits that the process of payment of service tax commenced only after issuance of summons to the Authorized Signatory of the appellant even though registration was granted in the year 2008. Thus, the appellant suppressed the facts from the knowledge of the Department on the service tax liability, therefore, penalties are imposable under section 76 and 78 of the Finance Act, 1994
5. I find that there is no dispute of the fact that the appellant are manufacturer of Readymade Garments & Made ups. There have Paid freight charges for the service provided by goods transport agency during the period 01.10.2005 to 31.03.2008, and required to the service tax. It is also not in dispute that they failed to discharge the service tax till 2011 even though obtain registration in the year 2008, without any valid reason. They paid the service tax only when the process for recovery of service tax amount was initiated by the department after issuing the summons to Shri Chandrabhushan Mishra, Excise Executive of the appellant. The appellant is not disputed the liability but pleaded that the service tax amount on the GTA Service was not paid by them for the period 01.10.2005 to 31.03.2008 under a bonafide misconception of the provisions of law, which they have discharged with interest, therefore, penalty under Section 76 and 78 are not warranted. I do not find merit in the contention of the Ld. Advocate for the appellant that no penalty imposable inasmuch as even though they have taken registration in the year 2008 failed to discharged the service tax, when the law is clear on the subject. However, penalty both under Section 76 and 78 of the Finance Act, 1994 cannot be imposed simultaneously, in view of the judgement of Hon'ble Gujarat High Court in Raval Trading Company's case (supra). Further, the appellant are entitled to discharge 25% of the penalty imposed under Section 78 of the Finance Act, 1994 subject to fulfilment
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of the conditions laid down thereunder. In the result, the impugned order is modified to the extent of setting aside imposition of penalty under section 76 and allowing the benefit of discharging 25% of the penalty imposed under Section 78 of the Finance Act, 1994 subject to fulfilment of the conditions laid down. Appeal disposed of in the above terms.