2015 (3) TMI 581 - AT - Service Tax

Imposition of penalties u/s 77(1)(c) - Whether the appellant had cooperated with the authorities for the purpose of audit by submitting documents or not - Held that - It is noted from the records that on 23-07-2009 the audit team of the Commissioner of Central Excise and Customs, Vadodara -1 addressed a letter to the appellant for producing/submitting assessee s profile. The Said letter was unattended to and on 7-9-2009, the office of the Commissioner of Central Excise & Customs, Vadodara-1 sent a reminder to the appellant. It is the claim of the Revenue that the appellant wilfully did not submit the documents while the appellant produces before us an acknowledged copy of the letter dated 20-09-2009 received by the audit section on 22-09-2009 wherein they have attached the required set of documents. It is to be noted that factually, subsequent to such letter having been given to the department, audit has been taken place and final audit report has also been given to the appellant. - there is no reason to sustain penalty imposed by the adjudicating authority and upheld by the first appellate authority on the appellant for non-cooperation - Decided in favour of assessee.

Summary

Issues:
Penalties imposed under Section 77(1)(c) of the Finance Act, 1994 read with Rule 5A(2) of the Service Tax Rules, 1994 for non-cooperation during audit.

Analysis:
The appellate tribunal considered the appeal against penalties imposed by the adjudicating authority under Section 77(1)(c) of the Finance Act, 1994 and Rule 5A(2) of the Service Tax Rules, 1994. The main issue before the tribunal was whether the appellant had cooperated with the authorities for the purpose of audit by submitting the required documents. The audit team of the Commissioner of Central Excise and Customs, Vadodara -1 had sent a letter to the appellant requesting the submission of assessee's profile. Despite a reminder sent by the office of the Commissioner, the appellant allegedly did not submit the documents. However, the appellant presented an acknowledged copy of a letter dated 20-09-2009, received by the audit section on 22-09-2009, along with the required set of documents. Subsequently, the audit took place, and a final audit report was provided to the appellant.

The tribunal noted that the appellant did, in fact, submit the required documents, as evidenced by the acknowledged letter. Therefore, the tribunal found that there was no valid reason to uphold the penalty imposed by the adjudicating authority and affirmed by the first appellate authority for alleged non-cooperation during the audit process. Consequently, the tribunal set aside the impugned order and allowed the appeal with any consequential relief deemed necessary.