At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad
By, THE HONOURABLE MR. M.V. RAVINDRAN
By, MEMBER (JUDICIAL)
For the Appellant: S.D. Gohil, Chartered Accountant, Advocate. For the Respondent: K.J. Kinariwala, Superintendent (AR).
M.V. Ravindran, J.
1. This appeal is directed against OIA No.Commr(A)/248/ VDR-I/2012, dt.30.04.2012.
2. Heard both sides and perused the records.
3. The relevant facts that arise for consideration, after filtering out the unnecessary details are that the appellant herein is registered with the authorities under Service Tax regime and is engaged in rendering the services of construction of residential complex. During the period October 2004 to March 2008, it was noticed that the appellant had short paid the Service Tax and did not indicate the same in the ST-3 returns. Show cause notices dt.16.07.2009 and dt.08.09.2009 were issued to the appellant. During the interregnum period, it seems that the appellant had paid the entire amount of Service Tax liability and interest thereon. The adjudicating authority, after following the due process of law, confirmed the demands raised with interest, disallowed CENVAT Credit and imposed penalties under Sections 76, 77 and 78 of Finance Act, 1994. On an appeal, the first appellate authority confirmed the demand with interest as it was not contested, set aside the Order-in-Original which disallowed the CENVAT Credit, but upheld the penalties imposed under Section 76 and 78 along with penalties under Section 77 and Rule 7C of Service Tax Rules, 1994.
4. The appellant is represented and the ld.Counsel submits that the penalties imposed on the appellant under Section 76 of Finance Act, 1994 should be set aside as the appellant has discharged the Service Tax liability before the issuance of show cause notice. He would rely upon the decision of this Tribunal in the case of Jivant Enterprises Vs CST Ahmedabad 2012 (28) STR 582 (Tri-Ahmd) and also on the judgment of Hon'ble High Court of Gujarat in the case of CST Vs Manan Motors 2013(31) STR 535 (Guj).
5. On consideration of the submissions made by both sides and perusal of the records, I find that the issue which falls for my consideration is whether the appellant needs to be penalized under Section 76 and 78 of Finance Act, 1994 simultaneously. On perusal of the records, I find that both the show cause notices dt.16.07.2009 and dt.08.09.2009 are issued for imposition of penalties under Section 76 of Finance Act, 1994. Though there is a mention of issuance of the corrigendum in the order of the first appellate authority, I do not find any corrigendum in the appeal memoranda which has been filed by the appellant. In my view, the entire case of imposition of simultaneous penalties on the appellant needs reconsideration by the adjudicating authority in as much as the view taken by the Bench in the case of Jivant Enterprises (supra) needs to be addressed by the lower authorities.
6. Another proposition which was made by the ld.Counsel is that they have paid the entire amount of Service Tax and interest thereof before issuance of show cause notice. On perusal of the Order-in-Original, I find that the issue of payment of Service Tax liability before issuance of show cause notice is not that very clear. If the appellant has paid the amount of Service Tax liability and the interest before the issuance of the show cause notice, the same needs to be considered for application of provisions of Section 73(1) of Finance Act, 1994.
7. Since this factual issue needs verification, I set aside the impugned order to the extent it imposes penalties under Section 76 & 78 of Fin
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ance Act, 1994 by way of remand to the adjudicating authority.8. I uphold the penalty imposed on the appellant under Section 77 and Rule 7C of Service Tax Rules, 1994. 9. The adjudicating authority will reconsider the issue afresh after following the principles of natural justice before coming to conclusion. 10. The appeal is disposed of as indicated hereinabove.