At, Customs Excise Service Tax Appellate Tribunal Regional Bench Hyderabad
By, THE HONORABLE JUSTICE: DR. SATISH CHANDRA (PRESIDENT) AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
For Petitioner: Y. Sreenivasa Reddy, Advocate And For Respondents: Guna Ranjan, Superintendent (AR)
1. Five days delay is condoned for the reasons mentioned in the application. Appeal is admitted. With the consent of both sides, the appeal per se is also taken up for hearing.
2. The above appeal is filed against the Order-in-Original No. HYD-EXCUS-003-COM-029-15-16 dated 29-3-2016. Period in dispute is April 2008 to December 2012.
3. The brief facts of the case are that the appellant is a society formed with unemployed youth. The appellant was providing the manpower on outsourcing basis to various Government offices. When Voluntary Compliance Encouragement Scheme (VCES) was introduced, the appellant filed application thereunder on 30-12-2013 declaring the liability of Rs. 13,20,395 and after deducting the amount of Rs. 2,19,623/-, net liability of Rs. 11,00,762/- was arrived and they paid the 50% of liability as required under the scheme. During the scrutiny of the VCES declaration, it was observed that appellant has shown income of Rs. 3,64,06,675/- as per income and expenditure statement for the period 2008-2009 to 2012-2013. Accordingly Department took the view that appellants were liable to pay the short paid Service Tax liability of Rs. 34,11,119/- in adjudication proceedings vide impugned order dated 29-3-2016, the Commissioner confirmed the said liability along with interest liability thereof, imposed penalty of Rs. 2000/- under Section 77 of the Finance Act, 1944 and a penalty of Rs. 17,20,560/- under Section 78 of the Act. Being aggrieved the appellant has filed this appeal.
4. Heard Shri Y. Sreenivasa Reddy and Shri Guna Ranjan representing the Appellant and Revenue respectively.
5. From the record, it appears that the appellant declared a turnover in their Income Statement which has been accepted by the department under the VCES scheme. When that is accepted by the department now the plea of inflated turnover cannot be taken up. Two wrongs cannot make a right. Hence, we uphold the demand along with interest.
6. However, regarding the penalty we are the view that appellant, presumably, as per wrong advice, has inflated the turnover for getting tender or other benefit which was taken into account by department and this was a new subject for the appellant who is based in rural area. Hence, we are of the view that penalty in t
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his case is not desirable and therefore, set aside all the penalties imposed. In the result, the tax demand along with the interest is upheld. Penalty is cancelled. The appeal is partly allowed on above terms. COD application also stands disposed.