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TMI Blog2017 (10) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... challans dated 31.12.2009, 06.01.2010, 07.01.2010, 01.01.2010 and 19.02.2010 along with ₹ 1,72,273/- towards interest and a sum of ₹ 71,566/- through utilization of CENVAT Credit towards their service tax dues - Moreover, though the appellant has collected the service charges along with the service tax amount during the period April 2008 to December 2009, appellant had not deposited such service tax into the Government Exchequer in time nor had intimated the department the details of such receipts in their ST3 Returns filed during the material period, which is not disputed by the appellant herein. Therefore, the appellant has contravened Section 70 of the Finance Act,1994 read with Rule 7 of Service Tax Rules, 1994 - the appellant has intentionally suppressed the service tax collected from its customers and failed to remit the same in the Central Government's Account for the period 2008-09, with an intention to evade payment of tax. In the Order-in-Original, the Additional Commissioner, only on the fact that the appellant herein have made payments during different periods within a span of four months that too, after the audit conducted by the Officers of the Interna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said Order-In-Original passed by the learned Additional Commissioner, the appellant filed an Appeal before the learned Commissioner of Service Tax (Appeals), Chennai, who after due process of law rejected the Appeal vide Order-In-Appeal No.295/2015 (STA-II) dated 30.10.2015. Aggrieved by the said order of the Commissioner, the appellant filed an Appeal before the first respondent in terms of Section 86 of the Finance Act, 1994 on various grounds. But the first respondent / Appellate Tribunal, without recording any findings on the grounds raised by the appellant, dismissed the said Appeal. Against which, the appellant preferred this Civil Miscellaneous Appeal before this Court. 3. The learned counsel for the appellant would submit that the final order No.42061 of 2016 dated 28.10.2016 passed by the first respondent in Appeal No.ST/40263/2016 is contrary to law and liable to be set aside on the following grounds:- (a) The order passed by the first respondent is without jurisdiction and in exercise of excessive jurisdiction. (b) The act of first respondent in passing a non-speaking order, without considering the grounds of appeal raised by the appellant, is in complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neer, Commercial Training or Coaching and Man Power Recruitment or Supply Agency Services' to various IT and Engineering Companies, like Satyam Computer Services, Titan Industries, various divisions of Ashok Leyland etc., and were registered with the Service Tax Department with Registration No. AACCG6156EST001. They also provide service of recruitment of skilled manpower to their clients and also provide training to various professionals in engineering related fields. They also undertake Engineering Project Consultancy for corporate. However, for both project consultancy and manpower supply, the appellant have paid Service Tax dues under the head 'Consulting Engineer Services'. 7. The company's accounts were audited by scrutinizing their records by the officials of the Internal Audit Group of Chennai Service Tax Commissionerate. During the said audit, it has been found that they have not remitted the service tax amount of ₹ 13,36,869/- collected from their customers into the Central Government account for the period from April 2008 to December 2009 and has withheld the same. The appellant has pleaded that due to financial crisis, they were not in a position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20/- (Rs. One lakh eight hundred and twenty only) should not be demanded from them under Section 75 of the Finance Act, 1994 for the belated payment of Service Tax for the period May 2007 to March 2008 as detailed in the Annexure-B to this notice; and (f) Penalty should not be imposed on them under Section 76, 77 78 of the Finance Act, 1994 for the contraventions mentioned supra. 10. The appellant filed a reply on 03.11.2010, in which they have contended that they were regularly paying service tax and sometimes, they paid the service tax belatedly along with interest due to paucity of funds and promised to pay the amount as early as possible. The appellant also contended that as per Section 73(3) of Finance Act, if there is any shortage of payment, the officer can initiate recovery proceedings within one year from the date of receipt of such information of payment and as there is no short payment for the period by the appellant, the Show Cause Notice ought not to have been issued and is liable to be dropped. It is also contended that the Show Cause Notice did not allege any fraud, collusion, wilful mis-statement or suppression of facts. The service tax and interest have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid: Explanation:- For the removal of doubts, it is hereby declared that the interest under Section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of Service Tax or erroneously refunded Service Tax, if any, as may be determined by the Central Excise Office, but for this sub-section. 6.2. Further, in case of M/s. Tidewater Shipping (P) Ltd vs. Commissioner of Service tax, Bangalore, reported in 2008(11) STR 475 (Tri.Bang) the Tribunal held as under: 4. On a very careful consideration of the entire issue, we find that in respect of each of the cases, due to bonafide belief, the appellants did not discharge the Service Tax liability in time. But, as soon as the lapse was pointed out by the departmental authorities, they remitted the Service Tax much before the issue of Show Cause Notice as given in detail in the above tabular column. This bench has held in large number of cases that if duty is paid before the issue of Show Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of service tax, and inform the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of service tax so paid : .......... From the above it is very clear that there need not be any show cause notice issued to the appellants even when the service tax has escaped assessment, and if the same has been paid by the appellants on his own ascertainment. In this case the appellants have ascertained the service tax liability on their own and paid it off which is admitted by the department in Order-in-Original. Further, the said provisions also state that even the service tax is ascertained by the Central Excise officers and if it is paid or by the assesee in that case also the appellants should not be served upon any notice under sub-section (1) Considering both the situations, the appellants case is covered under the provisions of sub-section (2A) of Section 73 for non-issuance of show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. The details of payments in respect of Annexure 'A' to notice, are as follows:- Sl.No Challan Date Service Tax (Rs) Interest (Rs) 1 31/12/09 356754 69956 2 challans 2 06/01/10 591375 82767 7 challans 3 07/01/10 73633 8077 1 challans 4 11/01/10 157149 10403 6 challans 5 19/02/10 49669 1070 2 challans 6 31/12/09(*) 36146 6156 3 challans 7 27/03/12 577 10523 2 challans 8 Cenvat payment 71566 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot power not to impose any penalty if the assessee proves that there is reasonable cause for the failure to comply with the provisions of the Act. But the appellant was aware that they are liable to pay service tax on the income received for services rendered, within a prescribed date and they have also collected the service tax amounts from their customers. The tax amount collected for a long period and remitting the same after the advice of the audit authorities cannot be accepted as a reasonable cause for failure of remitting the amount and further, the appellant has filed ST-3 Returns for the said period, which did not reflect the actual taxable value, which is a deliberate suppression of information. In such circumstances and also considering the fact that the appellant has paid entire tax and interest, the Additional Commissioner has passed an order, by reducing the penalty amount to 25%, if the appellant pays the same within 30 days. The said order is extracted hereunder:- 8.4. The assessee has requested to invoke the discretionary power under Section 80 of the Finance Act, 1994 to waive the entire penalty proposed to be imposed on them. Section 80 of the Finance Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hirty six thousand eight hundred and sixty nine only) under Section 78 of the Finance Act, 1994 on M/s.GE Infotech Pvt. Ltd. However, the penalty amount shall stand reduced to 25% of the said amount, if the same is paid within thirty days from the date of communication of this order in terms of proviso to Section 78 of the Finance Act, 1994. 10.7 I drop the penal proceedings initiated under Sec.76 and 77 of the Finance Act, 1994. 18. The appellant reiterated the same grounds before the Commissioner of Central Excise (Appeals) and the Commissioner upheld the orders of the Additional Commissioner in toto and aggrieved against the same, the appellant appealed before the CESTAT and by citing various decisions, raised the ground that if duty is paid before the issue of Show Cause Notice, no penalty and interest can be levied. 19. The CESTAT passed the impugned order on 28.10.2006 dismissing the appeal by holding that it is not in dispute that the appellant paid short-payment after being pointed out, however, they charged and collected service tax, which they have not remitted to the Government Exchequer and further, short payments were not made in one go, but over a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards their service tax dues. 23. Moreover, though the appellant has collected the service charges along with the service tax amount during the period April 2008 to December 2009, appellant had not deposited such service tax into the Government Exchequer in time nor had intimated the department the details of such receipts in their ST3 Returns filed during the material period, which is not disputed by the appellant herein. Therefore, the appellant has contravened Section 70 of the Finance Act,1994 read with Rule 7 of Service Tax Rules, 1994. 24. From the foregoing, it is clear that the appellant has intentionally suppressed the service tax collected from its customers and failed to remit the same in the Central Government's Account for the period 2008-09, with an intention to evade payment of tax. 25. On perusal of records, it is seen that the categorical and undisputed facts are that having collected service tax from its customers, the appellant failed to remit the same in the Central Government's Account for the period 2008-09, but during the Audit, they pleaded that due to financial crisis, they were not in a position to pay the tax within the prescribed due d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sub-section (1) of section 73 shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty which shall be equal to hundred per cent of the amount of such service tax: Provided that in respect of the cases, where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 upto the date on which the Finance Bill, 2015 receives the assent of the President (both Days inclusive), the penalty shall be fifty per cent of the service tax so determined. . Provided further that where service tax and interest is paid within a period of thirty days of -- (i) the date of service of notice under the proviso to sub-section (1) of section 73, the penalty payable shall be fifteen per cent of such service tax and proceedings in respect of such service tax, interest and penalty shall be deemed to be concluded; (ii) the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73, the penalty payable shall be twenty-five per cent of the service tax so determined: Provided also that the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of such cases, the provisions of section 76 or section 78, as the case may be, as amended by the Finance Act, 2015 shall be applicable. (2) In cases where show cause notice has been issued under sub-section (1) of section 73 or under the proviso thereto, but no order has been passed under sub-section (2) of section 73 before the date on which the Finance Bill, 2015 receives the assent of the President, the period of thirty days for the purpose of closure of proceedings on the payment of service tax and interest under clause (i) of the proviso to sub-section (1) of section 76 or on the payment of service tax, interest and penalty under clause (i) of the second proviso to sub-section (1) of section 78, shall be counted from the date on which the Finance Bill, 2015 receives the assent of the President. 26. The reduction of penalty from the original amount to 25% is not contrary to the above Section and hence, it is valid. The appellant's suppression has been condoned to certain extent by the authorities and the same requires no modification. The grounds raised in this appeal have already been raised before the Additional Commissioner, Commissioner and the CESTAT. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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