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TMI Blog2008 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri A. K. Srivastava, Member (Technical) (Final Order No. A/748/WZB/2008-CIV/SMB dt. 4.12.2008 certified on 10.12.2008 in Appeal No. ST/114/2008) Shri N.A. Sayeed, JDR for Appellants Shri M.A. Nyalkalkar, Adv. for Respondents [Order per : A.K. Srivastava, Member (Technical)] - This is the appeal filed by the Revenue. 2. The brief facts of the case are that M/s Dige Associates Pvt Ltd, Kolhapur (the respondents herein) were engaged in providing "Architects Services" (a taxable service) to their clients during the period from 2002-2003 to 2006-2007 (upto June, 2006) and had received charges from their clients for the same. 3. The Assistant Commissioner of Central Excise, Kolhapur-I Division, vide Order-in-Origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were engaged in providing the services of "Architects" before 2002. However, they had not obtained registration under the provisions of the Finance Act, 1994, nor paid the applicable service tax, nor filed the periodical returns, until they were directed by the Department to do so i.e. on 24.07.2006. This clearly shows that the assessee had deliberately not paid the service tax on the services provided by them, with an intention of deliberate evasion of service tax, by not disclosing the activity to the Department; (iii) The findings of the Commissioner (Appeals) relied upon the decision of M/s Financers Vs CCE, Jaipur reported in 2007 (8) STR 7 (Tri-Delhi) that "the imposition of penalty under both the Sections 76 and 78 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under Section 78 ibid is rightly imposable. In the decision of Hon'ble CESTAT, in the case of M/s Bharat Petroleum Corporation Vs CCE reported in 2002 (l39) ELT 382, it has been held that offence once established, penalty is mandatory. As the respondents have paid the service tax only after being pointed out by the Department, penalty is to be imposed. 6. The learned J.D.R. also relied upon the Tribunal decision in the case of METT Macdonald Ltd Vs Commissioner of Central Excise, Jaipur reported in 2006 (2) STR 524 (Tri-Del) in which it was held that when no disclosure of the fact of rendering Consulting Engineering Service to Central Command Area (CAD) was made by the assessee to the Department, and only part of tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, they were fully aware of the service tax liability and still deliberately avoided the registration with intention to evade payment of service tax. Their mala fide intention would have been proved if they would have recovered the service tax from their client and instead of paying the same to the Government, would have retained the same with them. However, that is not the case. It is admitted fact that they had not charged and recovered any service tax from their clients and that they had paid the service tax out their own pocket; (iii) When the dispute about the levy of service tax is ultimately settled by the Hon'ble Supreme Court in 2007, the late payment of the service tax by them during the period 2002-03 to 2006-07 is bound to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the assessee had paid tax out of his pocket and it is not the case that the assessee recovered the service tax from the customers but not paid to the Government. 12. Various case laws, wherein lenient views were taken with reference to imposing penalty/waiving penalty under Section 80 and reducing penalty under Sections 76 and 78, which are directly applicable to the present issue, are listed below: (a) ETA Engineering Ltd Vs CCE, Chennai 2004 (65) RLT 669 (CESTAT-LB)=2004 (174) ELT 19 (Tri.LB)]; (b) CCE, Delhi -I Vs J.S. Architect Pvt Ltd [2005 (188) ELT 455 (Tri- Delhi)]; (c) Medpro Pharma Pvt Ltd Vs CCE, Chennai [2006 (4) STR 322 (Tri.Delhi)]; (d) Shri Laxmichand Dharshi Vs CCE, Mumbai [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. 14. In the case of METT Macdonald Ltd cited supra by the learned J.D.R., the party, out of the service tax demand of Rs. 9,11,414/- had deposited Rs. 7,11,199/- leaving the balance amount of service tax of Rs. 2,00,215/- as unpaid, whereas in the case before us, the respondents have paid the entire service tax along with the interest before the issuance of the show cause notice/adjudication. Hence, the facts are distinguishable. Moreover, no reference has been made to the provisions of Section 80 of the Finance Act, 1994 in the said case law, The Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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