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TMI Blog2018 (10) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... also settled principle in law that every prescribed condition cannot be brushed aside as procedural and act of the person justified as bonafide, just to promote the cause of the appellants. It is also settled principle in law that no one should be allowed to take benefit of his own wrongs. (commodum ex injuria sua non habere debet and nullus commodum capers potest de injuria sua propria.) - In the present case undisputedly appellants had been evading the payment of Service Tax during the period 2011 onwards. VCES scheme was intended to help the persons, who would like to discharge the tax liability and was a onetime measure. Since the appellants were evading the payment of tax willfully during the relevant period they cannot claim benefit of such scheme without showing the compliance in respect of the scheme. Appellants had filed the declaration under the VCES scheme on 31.12.2013, along with the challans dated 29.12.2013 & 30.12.2013. Since the declaration was filed only on the last date for making 50% of the payments under the scheme, they had virtually denied the departments the opportunity of any cross verification. Further even if it is accepted that the error was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixty Five Lakhs Sixty One Thousand Three Hundred and Sixty Only). On scrutiny of the said declaration and challans it was observed that Appellant had paid the amount in respect of their unit having STC No AAECM6274BST002 and based in Vishakhapatnam. Since on enquiry appellants failed to remove the discrepancy, and deposit the amount under the account head of Goa Unit the natural corollary was that they had failed to make deposit of 50% of Service Tax amount declared by the due date and hence declaration under VCES was liable to e rejected. It was also gathered from Director General Central Excise Intelligence Goa Regional Unit (DGCEI), that certain enquiries had been initiated against the said Goa Unit as on 1.03.2013, hence the unit was not qualified to make the declaration under the VCES scheme. A show cause notice for rejecting the appellant declaration was issued and adjudicated against the Appellant. On appeal, Commissioner (Appeal) upheld the order of adjudicating authority, rejecting the declaration made by the Appellant on the ground that they had failed to make fifty percent/ 100% of admitted tax liability by the due date. Against this order of Commissioner (Appeal), Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CM6274BST002 00005 29.03.2014 700543 21017 21363 Total 10545004 316352 330500 On scrutiny of GAR-7 Challans provided by M/s MVR, it was noticed that they have remitted the Service Tax payments into Assessee Code No AAECM6274BST002 instead of remitting the same to Assessee Code No AAECM6274BST001. Assessee code No AAECM6274BST002 pertains to their business operations at Vishakhapatnam. The Assessee Code No AAECM6274BST001 is allocated by Commissioner of Customs, Central excise and Service Tax Goa for taxable services under Commercial or Industrial Construction Service and Work Contract Services. Since the service tax liability pertains to the taxable service rendered in the jurisdiction of Goa, in the absence o centralized registration. M/s MVR ought to have remitted the service tax payment into their STC No AAECM6274BST001 The show cause notice has been adjudicated by the Commissioner and following order passed- (i) I classify the services rendered by M/s M Venkatrao Inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting this they relied upon following decisions:- i. Order Dated 19.09.2014 in WP No 1384/2008, in case of Hindustan Unilever Ltd vs Dy Commissioner of Commercial Taxes, Corporate Division Others. ii. Commissioner Central Excise Service Tax vs K K Kedia [(2014) 35 STR 383 (T)] iii. Pepsico India Holdings (P) Ltd. Vs Commissioner Central Excise Allahabad [(2010) 255 ELT 299 (T)] 3.2 Challenging the order of Commissioner, Appellant has in second appeal urged that:- a. It was only on account of the clerical error and communication gap that the amount required to be paid in respect of STC No in Goa jurisdiction, the same was deposited in the name of STC No in Vishakhapatnam. b. Commissioner has in his order relying on various decisions accepted the payments shown in respect of their Vishakapatnam unit for discharging the liability of Service Tax due in Goa. c. They had paid the entire amount of Tax due along with the interest before the issuance of Show Cause Notice. d. Commissioner has proceeded to impose penalty on them without showing any mensrea. 4.1 Shri A Sarveswara Rao, Advocate appeared for the Appellant and Revenue was represented by Shri M P Daml ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good the discrepancy, sought to justify their act and stated that the error in making the challan was a bonafide clerical error and should be condoned, and there declaration accepted which was not in accordance with the procedure laid down for opting for the scheme. Since the Appellant had not satisfied the procedure laid down for opting for the scheme, the order of Commissioner (Appeal) cannot be faulted with. d. Commissioner order to cannot be faulted because once the appellants have not discharged the tax liability by the due date they have contravened the provisions of Finance Act, 1994 and hence are liable to penalty. e. Further the Commissioner has in his order clearly held that Appellant was during the relevant period collecting the service tax from their customers and not filing ST-3 returns or paying the service tax in the account of government. Since they were not paying the service tax amount due to the government account by the due date, penalty against the appellant is justified. 5.0 We have considered the appeals filed and also the submissions made by both the sides during the course of arguments and in written submissions filed. 5.1 It is a fact that, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission. While considering that question learned Judges made a reference to the Privy Council decision in Montreal Street Railway Company v. Normandin - AIR 1917 PC 142 and the Federal Court decision in Biswanath Khemka v. Emperor - AIR 1945 FC 67. The Constitution Bench held that the provisions of Article 320(3) are not mandatory and non-compliance of those provisions does not afford any cause of action in a court of law. Privy Council in the above quoted decision has observed that the question whether provisions in a statute are directory or imperative depends upon the object of the statute and no general rule can be laid down. When the provisions of the statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory. This is not a case where a certain provision is mandatory or directory. Here the question is whether concessional relief of duty which is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on he has verified and satisfied himself that these amounts were paid only in respect of the unit in Goa, as is evident from para 33, reproduced below:- 33. I find from the notice that notice confirm the payment of Service Tax amounting to ₹ 1,08,61,356/- (including cess) and interest amounting to ₹ 3,30,500/- under the Assessee Code AAECM6274BST002. The notice has also not disputed the claim of the noticee vide letter dated 23.06.2014 (Para 19 of Notice) that they have not executed any other projects which attract Service Tax liability either in Vishakhapatnam or at any part of India during the aforesaid period except these three commercial projects and that the question of payment of Service Tax under STC No AAECM6274BST002 does not arise. Thus it is clear from the notice that noticee do not have any other Service Tax liability other than addressed in the notice and the deposit of service tax made by the noticee into wrong code is towards their Service Tax liability of STC No AAECM6274BST002. 5.5 It is also an admitted and undisputed fact that appellants were registered assessee and were paying service tax. However subsequently they stopped payment of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.36% 0 January 0 12.36% 0 February 2978018 12.36% 368083 March 6988944 12.36% 863083 Total 40473701 12.36% 5001799 2013-14 April 0 12.36% 0 May 0 12.36% 0 June 385807 12.36% 47686 July 2850383 12.36% 352307 August 1861149 12.36% 230038 September 0 12.36% 0 October 7537940 12.36% 931689 November 0 12.36% 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel would make the provision relating to prosecution nugatory. ii. M/s Gujarat Travancore Agency, Cochin Vs Commissioner Income Tax [1989 (42) ELT 350 (SC)] that .. unless there is something in the language of statue indicating the need to establish the element of mensrea it is generally sufficient to prove that default in complying with the statue has occurred, In our view there is nothing in Section 271(1)(a) of the IT Act which requires that mensrea must be proved before penalty can be levied under that provision. iii. Union of India Vs M/s Dharmendra Textile Processors [2008-TIOL-192-SC-LB] that It is delinquency of the defaulter itself which establishes his blameworthy conduct . Without any further proof of existence of mensrea. iv. M/s Rajasthan Spinning and Weaving Mills {2009 (238) ELT (SC) that ..We completely fail to see how payment of differential duty, whether before or after the show cause notice is issued can alter the liability for penalty, the conditions for which are clearly spelt out in Section 11AC of the Act. 5.7 Since appellants have not filed the ST-3 returns during the relevant period Commissioner was also write in impos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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