9911796707
TMI Blog2019 (1) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... r the matter was adjudicated by the Adjudicating Authority. The appellant did not commit fraud nor was there any mis-statement or suppression of the facts with an intention to evade payment of service tax as he was regularly paying the required amount of the service tax to his authorized representative. This indicates that there was no intention on the part of the appellant to evade payment of service tax - it was not appropriate to impose penalty under Sections 76 and 78 on the appellant - penalty not imposable - demand of service tax with interest upheld - appeal allowed in part. X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Fund, Employees State Insurance, Labour License, Service Tax etc. 12) That the second party shall receive remuneration from the First party which would equal to the remainder of Service Charges after meeting the obligations/ fulfilling the conditions as laid out is para 4, 5, 9, 10 and 11." 3. The learned Counsel has also submitted that it was Shri Abhishek Kumar who was collecting payments from various customers and making payment to the staff regarding their salary etc. He was also depositing the required taxes etc. The learned Counsel has submitted an affidavit of the appellant to this effect. It has further been contended that as soon as they came to know that Shri Abhishek Kumar had not deposited the due service tax with the Service Tax Department, the appellant immediately made good all the short paid amount of service tax on the services provided by the appellant to various organization. The details of payments made by the appellant after initiation of investigation with the department are as follows: Paid under ST-3 Returns As admitted in the SCN and appropriated in impugned order 40,01,790/- Before issuance of SCN (though not considered in the SCN or OIO) Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee before issue of Show cause notice on his own volition deposits the service tax and interest thereon, no penalty would be leviable, penalty under section 78 should not have been imposed on the appellant since the appellant deposited major amount of Service tax which was short paid before issue of Show Cause Notice. 6. It has also been contended that though the appellant may have been a proprietary firm, but the responsibility of making due compliance of statutory provisions as per the agreement was that of Shri Abhishek Kumar and the appellant had been providing Shri Abhishek Kumar the required amount of Service Tax to be paid to the Department. It was, therefore, the primary responsibility of Shri Abhishek Kumar to deposit due amount of service tax and penalty should not have been levied on the appellant. 7. Learned Counsel has also relied upon several case laws, details of which are given below: 1. Southern Erectors (P) Ltd. vs. CST Chennai 2018 (7) TMI 1219 - CESTAT Chennai 2. CST, Chennai vs Lawson Travels & Tours (I) P Ltd. [2015 (38) STR 227 (Mad)] 3. Hemangi Enterprises vs. CCE, Pune I [2015 (40) STR 791 (Tri-Mumbai)] 4. CCE, Pune I vs. Ganesh Enterprises [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated by the Adjudicating Authority. The appellant thereafter also filed ST-3 returns covering the period from April 2007 to March 2012 alongwith penalty for late filing. 11. The learned Counsel for the appellant since the very beginning had submitted that it was not contesting the determination of service tax under Section 73 (1) of the Finance Act, 1994 and same stands deposited with the Revenue Authorities but the provisions of Section 80 of the Finance Act, 1994 was applicable as the circumstances under which the evasion of service tax took place was beyond the control of the appellant. It was, therefore, submitted there was no reason to impose penalty under Sections 76 and 78 of Finance Act, 1994. 12. We find from the record that the appellant had entered into an agreement with Shri Abhishek Kumar on 12/03/2006 whereunder he was made responsible for fulfillment of the entire statutory/mandatory requirements of laws. Clause 4 (c) of the agreement specifically mentions that Shri Abhishek Kumar will follow and fulfill all the statutory requirements pertaining to the service tax. The learned Counsel placed documents which demonstrate that the appellant was making payment of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein in which the appellant could not have had reasonable cause for the failure of discharge of service tax liability, what would constitute reasonable failure in a given case was held as essentially be a question of fact. In the case in hand the reasonable cause could be that in favour of the appellant as he had every reason to believe the Consultant that he has discharged the service tax liability as per the records". (emphasis supplied) 13. The judgment of the Madras High Court in the case of CST, Chennai vs. Lawson Travel & Tours (I) Pvt. Ltd. - 2015 (38) S.T.R. 227 (Mad.) also supports the view that we have taken and the relevant extract is reproduced below :- "7. A careful perusal of the order of the Tribunal would reveal that „reasonable cause‟ as provided under Section 80 of the Act has been recorded by the Tribunal stating that the respondent assessee had fallen into financial crisis on account of the criminal breach of trust committed by their sub-agent and criminal proceedings were initiated against such persons and the same are pending. In addition to the above, the Tribunal also came to hold that it is a case of payment of duty voluntarily at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
