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TMI Blog2009 (9) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to pay the Service tax amounting to Rs. 7,81,650/- including education cess; that basing on the above facts, a SCN dated 10-10-2007 was issued to the appellant directing them to show cause as to why the Service tax amount of Rs. 7,81,650/- including education cess should not be demanded under Section 73(1)(2) of the Finance Act, 1994 (hereinafter referred as the Act) interest under Section 75 of the Act should not be recovered and penalty under Sections 76, 77 and 78 of the Act should not be imposed; that on adjudication, the demand raised in the SCN was confirmed along with interest, besides imposing penalty of Rs. 200/- per day of delay or 2% per month of the Service tax determined under Section 76, penalty of Rs. 1000/- under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppression is proved by giving reasons on record, otherwise it will be harsh action against a ignorant tax payer; (vi) that in the instant case, the intention of evading duty is totally absent as the appellant was under confusion whether be requires to pay tax or not, as his relations with M/s. Supercraft Foundry and M/s. Swift Engineering Enterprises Pvt. Ltd. are on principle to principle; basis and not as employer and employee; (vii) that it was a confusing situation as to whether the appellant was coming under the network of the Service tax under the category of manpower recruitment or supply agency service or not; (viii) that in the case of M/s. Gajanand Agrawal - 2009 (13) S.T.R. 138, it is held that penalty cannot be imposed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineering Enterprises Pvt. Ltd. would fall under the category of manpower recruitment or supply agency service with effect from 16-6-2005; (ii) Whether there is any intention on the part of the appellant in not taking registration and paying Service tax and accordingly, contravened Section 78 of the Act. 4.1 Let me take the first issue. The first contention of the appellant that the lower authority has not dealt with the contents of their final reply properly with regard to the contention in respect of applicability of term manpower recruitment or supply agency service is not acceptable in view of the fact that the lower authority has discussed the activities of the appellant and accordingly, has concluded that the activities of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. Under the above circumstances, the conclusion of the lower authority that the activities of the appellant i.e. providing manpower to his above mentioned two clients are falling under the category of supply of manpower is in order. 5. The next issue to be considered is that whether the intention (mens-rea) could be attributed on the part of the appellant is not taking registration and paying Service tax during the period under dispute. The record reveals that the Department, on the basis of scrutiny of the records of M/s. Supercraft Foundry, has come across that the appellant was providing manpower to undertake the work of shot blasting in the factory premises of M/s. Supercraft Foundry and basing on the same, and also after recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emiliterate and accordingly does not have any benefits of evading the provisions of the Service Tax Law; that it is also not the case of the Department that the appellant has collected the tax from his clients and failed to pay the same to the Government; that under the above circumstances, the appellant has not acted deliberately for avoiding the Service tax. The Apex Court in the case of Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) has held that Extended period of five years is inapplicable for mere failure or negligence of the manufacturer to take out license or pay duty when there was scope for doubt that the goods were not dutiable - Unless there is evidence that the manufacturer knew that the goods were liable to duty or he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s :- (a) CCE v. Silver Oak Garden Resort - 2008 (9) S.T.R. 481 (T), (b) Financers v. CCE - 2007 (8) S.T.R. 7 (T), and (c) CCE, Ludhiana v. Pannu Property Dealers - 2009 (14) S.T.R. 687 (Tri.-Delhi) However, penalty is payable under Section 70, since it is a matter of late payment. In other words, once the appellant is freed from Section 78, automatically Section 76 would come into play. Therefore, the appellant is liable to pay penalty for the delay caused by him in not depositing the Service tax due to the Government under Section 76. Likewise, the appellant is also liable to pay interest under Section 75 of the Act. Further the appellant is also liable to pay penalty of Rs. 1,000/- as imposed by the original authority under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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