2016 (3) TMI 577 - AT - Service Tax

Rectification of Tribunal s order - Setting aside Section 78 penalty - Held that - the tax was collected and paid in time to the department and also appropriated only after detection by the department as they had not voluntarily paid and not registered with service tax and not filed returns. Therefore, there is no apparent mistake found to rectify the same. Appellants seeking to set aside penalty would amount to review of the order and this Tribunal has no power to review its own order as held by various High Courts and the Hon ble apex Court, the one being held by the Supreme Court in the case of CCE Belapur Mumbai Vs RDC Concrete (India) P. Ltd. 2011 (8) TMI 25 - SUPREME COURT OF INDIA . - Decided against the appellant

Summary

Issues:
1. Appellant's appeal against the penalty imposed under Section 78 of the Finance Act, 1994 for not remitting service tax collected to the government.
2. Appellant's request for rectification of apparent mistake on record and waiver of penalty.
3. Revenue's contention on the absence of error in the order and opposition to the modification of the order through the ROM application.

Analysis:
1. The appellant contested the penalty imposed under Section 78 of the Finance Act, 1994, arguing that they had paid the service tax on various dates, as evidenced in their grounds of appeal. They claimed to have promptly deposited the tax collected into the government account, except for a specific period, and sought rectification of the alleged mistake on record. The appellant also cited a case law to support their plea for penalty waiver based on the timely payment of tax before the issuance of show-cause notice. Furthermore, they contended that their activities fell under Works Contract and thus were not liable for service tax during the construction service period.

2. On the other hand, the Revenue representative opposed the appellant's assertions, maintaining that there was no error in the order. The Revenue pointed out that the appellate authority had previously determined that the appellant failed to remit the cash and neglected to obtain registration. Additionally, the Revenue argued against the modification of the order through the ROM application, asserting that such a request amounted to a review of the order, which is impermissible under the law.

3. After considering both parties' arguments, the Tribunal found that the appellant's ROM application aimed at setting aside the Section 78 penalty imposed in the final order. The Tribunal referenced its previous detailed findings and a relevant case law to support its decision. It was noted that the tax payments were made only after detection by the department, as the appellant had not voluntarily paid, registered with service tax, or filed returns. The Tribunal concluded that there was no apparent mistake on record to rectify, and attempting to annul the penalty would constitute a review of the order, which the Tribunal lacked the authority to perform. The dismissal of the ROM application was based on legal precedents from various High Courts and the Supreme Court, emphasizing the Tribunal's inability to review its own orders.