2019 (8) TMI 970 - HC - Service Tax

Validity of ST-3 return revised after 2 years - Whether the Tribunal was right in not considering the decision of coordinate bench passed in M/S CEOLRIC SERVICES VERSUS COMMISSIONER OF SERVICE TAX, BANGALORE. 2011 (2) TMI 764 - CESTAT, BANGALORE to hold that the revised ST3 returns filed by the appellant could not be considered as the same were filed after two years of filing the original ST-3 returns? - HELD THAT - The appeal is admitted on the substantial question of law. We fix the final hearing of this appeal on 21st October, 2019 at 3.00 p.m.

Summary

Issues:
Appeal challenging Tribunal's order under Central Excise Act and Finance Act, 1994; Questions of law regarding consideration of revised ST3 returns, non-payment of service tax, and benefit of Section 80.

Analysis:
1. The appeal challenges the Tribunal's order regarding the non-consideration of revised ST3 returns filed after two years. The appellant argued that the decision of a coordinate bench should have been considered. The Court noted that the Tribunal's decision was upheld as the revised returns were filed after the prescribed period, leading to no substantial question of law.

2. The issue of non-payment of service tax due to financial difficulty was raised, questioning whether it amounted to willful non-payment leading to penalty imposition. The appellant cited a previous case where penalties were deleted due to similar circumstances. However, the Court found the appellant's conduct unjustifiable, emphasizing that collecting tax from customers without remitting to the State warranted penalty imposition.

3. The benefit of Section 80 of the Finance Act, 1994 was contested, with the appellant seeking similar leniency granted in a prior case. The Court highlighted that a lenient view taken by the Tribunal in the past did not justify ongoing non-compliance. The Court emphasized that a lenient view does not excuse misrepresentation to customers and failure to fulfill legal obligations, leading to penalty imposition upheld by the Tribunal.

4. The Court admitted the appeal on the question of law related to the consideration of revised ST3 returns. The impugned order lacked reasoning, leading to a scheduled final hearing. The respondent waived service, indicating readiness for the upcoming proceedings.