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TMI Blog2012 (4) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any fraud, misrepresentation, collusion or willful mis-statement or suppression, there is no justification in levying the penalty – in favour of assessee. - Tax Appeal No. 2196 of 2010 - - - Dated:- 2-3-2012 - Akil Kureshi and Sonia Gokani, JJ For Appellant: Mr Devan Parikh Sr. Counsel For Respondent: Mr Gaurang H Bhatt JUDGEMENT Per: Sonia Gokani: Being aggrieved by the order of the Customs, Excise Service Tax Appellate Tribunal (for short CESTAT ) dated 06/01/2009 as well as dated 23/09/2009, the present appeal is preferred under section 35 (G) of the Central Excise Act in the following factual back ground. The appellant is a Co-operative Society rendering rent-a-cab service to M/s ONGC since many years. This service was provided under the contract agreement dated 21/12/99. Initially, as there was no levy on rent-a-cab service at the relevant date of agreement, there was no condition relating to payment of service tax in the contract. With effect from 1/4/2000, levy of service tax was introduced on rent-a-cab service. This being a new levy, it is the case of the appellant that they were unaware of legal provisions and moreover, there was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which met the same fate as appeal. Both the impugned orders have been challenged on various grounds raised in this appeal and proposing following questions as substantial question of law for our consideration: (i) Whether the order of the Honourable Tribunal is rendered unsustainable and unreasoned as the Honourable Tribunal failed to deal with the submissions pertaining to penalty? (ii) Whether or not the Honourable Tribunal has failed in law in appreciating that no penalty can be imposed on Co-operative Society when the levy itself is on commercial concern and Co-operative Societies are not covered under the service tax head? (iii) Whether the Honourable Tribunal erred in imposing penalty without arriving at a conclusion and whether demand is barred by limitation or not? (iv) Whether or not the Honourable Tribunal erred in not granting benefit of Section 80 of the Finance Act, 1994 in the context of imposition of penalty in the facts and circumstances of the present case? Heard learned senior counsel Mr. Deven Parikh for the appellant, who has fervently made submissions on behalf of the appellant. It is admitted that the challenge in this appeal is rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 481 (S.C.). (vi) case of Singh Brothers VS. Commissioner of CUS. C.Ex., Indore reported in 2009 (14) S.T.R. 552 (Tri. Del). (vii) case of Sonal Vyapar Ltd VS. Commissioner of Central Excise, Salem reported in 2010 (19) S.T.R. (Tri. Chennai) These are all the judgments of the Tribunal except two of them. In case of Commissioner of Service Tax, Banglore Vs. Vee Aar Secure reported in 2011 (22) S.T.R. 517 (Kar). , the Court found that the branch office was under bona fide belief that their head office had paid service tax on their behalf. However, subsequently a separate registration was obtained and entire service tax was paid with interest. The Court found that the security agency was bona fide, as it paid the amount with interest before show cause notice. Therefore, it was rightly found that there was no case for penalty. The Court also found that there was no substantial question of law arising in that Tax Appeal. The Principal Bench of CESTAT, New Delhi in case of R.S. Travels Vs. Commissioner of Central Excise, Meerut reported in 2008 (12) S.T.R. 27 (Tri. Del.) was dealing with a Rent-a-cab Operator service and service tax levied thereon. It was held by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11(A) of Central Excise Act, 1944. The CESTAT, Principal Bench, New Delhi in case of Singh Brothers VS. Commissioner of CUS. C.Ex., Indore reported in 2009 (14) S.T.R. 552 (Tri. Del) has dealt with the case where service tax was introduced from 16/7/2002 on Cargo Handling service, it was a bona fide belief that activities undertaken are not covered under service tax. Therefore, the show cause notice which was issued for the period from 21/8/2002 to 2/5/2006 was held substantially time barred and when suppression by the appellant was not found, extended period was not held invocable and penalty is also not imposed. The CESTAT, South Zonal Bench, Chennai in case of Sonal Vyapar Ltd VS. Commissioner of Central Excise, Salem reported in 2010 (19) S.T.R. (Tri. Chennai) do not hold extended period invocable in case of service tax, which was need to be paid whenever freight was incurred by the Customs House Agent (CHA) on goods transport service. The appellants were under the bona fide belief that liability to pay the tax is on CHA, not upon them. In such circumstances, in absence of any suppression on the part of the appellants, the Court did not allow the extension of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GC. Secondly, as pointed out by the learned counsel for the appellant, there were divergent views of different benches of Tribunal, which may have added to such confusion and thirdly if the appellant had persuaded their right of reimbursement of payment of service tax with the ONGC by way of conciliation and arbitration that ipso facto can not negate them the defence of bona fide belief of applicability of service tax. The Apex Court in case of Jay Prakash (supra) who were engaged in construction activities and appears to be group of industries, which would have possibly availability of legal advice did not permit to extend period of limitation when it held that there was bona fide doubt as to the non excisability of goods due to divergent view of the High Courts. Moreover, in absence of any evidence of fraud, collusion, wilful mis-statement and suppression made available by the department, the Court did not found that mere failure or negligence is sufficient for invoking the period. To that extent, we are of the firm opinion that both Commissioner (appeals) and Tribunal committed error in not accepting the plea of bona fide belief of the appellant. As there was a correspondenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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