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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 ..... vy, it is the case of the appellant that they were unaware of legal provisions and moreover, there was confusion regarding such liability of the appellant. Thus, on both the grounds the applicability of the service tax and the liability to pay the same being an ambiguity, no service tax was paid at the relevant point of time. In the year 2001, the appellant received such letter from the department pointing out its liability in respect of the services provided to the ONGC. In absence of such clause in the agreement, the ONGC denied to pay service tax w.e.f. 1/4/2000. It is the say of the petitioner that it was impossible for the petitioner to pay service tax as the same was not reimbursed by the ONGC. In view of the negotiation and arbitration, the order was passed in favour of the appellant directing the ONGC to pay the amount for the period in dispute. However, the amount of Rs. 16,57,321/- was to be first paid by the appellant and then the same was to be reimbursed by ONGC. In these circumstances, it is the say of the appellant that dues of the department could not be deposited in time. However, after obtaining its registration on 23/10/2002, the payment of service tax has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the appellant. It is admitted that the challenge in this appeal is restricted to the imposition of the penalty as duty has already been paid. It is urged by learned counsel that the demand made is barred by limitation and the period of limitation begins from one year from the relevant period, when intent of fraud is noticed. It is further urged that there was a fixed rate of contract with the ONGC of the appellant and from 1/4/2000 service tax has been made applicable to rent-a-cab service. Not only this was disputed by the ONGC for there being no such provisional contract but there was a need for conciliation and/or arbitration. Moreover, there was a bona fide belief on the part of the appellant that they were not liable to pay service tax being a Co-operative Society and this being an extended period of limitation, levy will not apply. He urged the Court that the appellant from very nomenclature is a Co-operative society of those land owners who have lost their lands in setting up the plant of the ONGC. The huge amount of penalty in the matter like this, when the demand itself is not sustainable under law, is not warranted and the appeal be allowed. Learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and service tax levied thereon. It was held by the Tribunal from the facts of the case that the appellant therein had informed the department about his activities in November, 2000 and there was no suppression of fact nor was any intent to evade the payment of service tax even though service tax returns were not filed. Therefore, it permitted only normal limitation period under section 73(1) of the Finance Act for the recovery of non paid service tax and not extended period of limitation. In another case of Kuldip Singh Gill Vs. Commissioner of Central Excise, Jalandhar reported in 2005 (186) E.L.T. 373 (Tri. Del), where the CESTAT, Principal Bench, New Delhi opined that the rent-a-cab Operator service, which attracted the service tax at the rate of 5% was not applicable to the case of the appellant and the cab was not leased out for any interval of time, for use by Corporation according to its discretion. That service tax under the heading does not cover all manner of transport or vehicle hire services and in absence of rent-a-cab service, the demand was not found sustainable. In the CESTAT, West Zonal Bench, Ahmedabad in case of Sunil Metal Corporation Vs. Commr. Of C.Ex., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not allow the extension of period of limitation nor the penalty. In light of the discussion of the decisions pressed into service by the appellant herein although those decisions which were of the Tribunal will have only persuasive value, but the appellant thereby succeeded in pointing out that levying of service tax on rent a cab service was comparatively a recent levy by the statute. Therefore, if the appellants were of the bona fide belief that they were not required to pay the service tax on such service rendered to the ONGC, extended period of limitation would not be available to the department even for levying the duty as same would be barred by law of limitation, particularly when there is a complete absence of any allegation of suppression on the part of the appellant society. However, it needs to be noted here that this challenge is made by the appellants by pressing into service all those authorities, the counsel of the appellants stated that the challenge to the demand of service tax is not pressed before this Court and the only issue is with regard to the penalty imposed in the order-in-original and confirmed by both i.e. the Commissioner of Appeals and CESTAT. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a correspondence earlier on 24/1/2001 intimating the department that the appellant was unable to discharge the liability on the ground of non payment of the service tax by the ONGC and being Co-operative Society expected to protect interest of land losers of ONGC, the society has not resorted to pay amount in absence of any provisions to collect the tax. The Tribunal was of the opinion that there was no valid ground for disputing the penalty at the stage of tribunal and there was no financial difficulty also pleaded before the Tribunal. The tribunal was also influenced by the fact that there was a minimum penalty imposed to the tune of Rs. 16,57,321/- and therefore, there is no cause for interference. Believing it for a moment that the appellants were unable to pay the amount on the ground of dispute with the ONGC though they were aware of the levy of service tax in absence of any fraud, misrepresentation, collusion or wilful mis-statement or suppression, there is no justification in levying the penalty. Moreover, when the entire issue for levying of the tax was debatable, that also would surely provide legitimate ground not to impose the penalty. Adjudicating authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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