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TMI Blog2024 (10) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... ded from time to time. This amount is held to be recoverable from the party. 2. I do not impose any penalty by invoking Section 80 of the Finance Act, 1994." 2.1 Appellant is registered as service provider mainly to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco Industries Ltd. as service recipient, it was observed that appellant was providing taxable services under the category of Cargo Handling Services, Maintenance & Repair Service, Man Power Recruitment Agency Service & Construction (Commercial & Industrial) Services to the service recipient since April 2005. However, they have not discharged the service tax due in respect of these services. 2.3 After completion of investigation and inquiry, a show cause notice dated 11.10.2010 was issued to the appellant asking them to show cause as to why:- "1. The service tax amounting to Rs. Rs. 11,40,046/- (Service Tax Rs. 11,10,933/- + Education Cess Rs. 22,219/- + Secondary & Higher Education Cess Rs. 6,894/-) should not be demanded and recovered from them alongwith appropriate Interest under the proviso to Section 73(1) of the Act r/w Section 75 of the Act. 2. Penalty should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 9,86,306.03 That the party submitted that he is a petty contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return thereafter on regular basis. That the party is ready to deposit the service tax, due as per the chart for calculation of tax submitted with the reply, along with interest. In view of the submissions party prays for waiver of penalty. At the time of personal hearing Shri Ram Kesh Paswan, Proprietor of the firm appeared before me on 13.05.2011 and stated that they are willing to deposit the tax as per calculation chart. They were innocent and ready to pay the tax due upon them. They are regularly paying the service tax after obtaining the service tax registration and furnishing the returns to the department. Further, they pleaded that now being ready to pay the due tax upon them and being innocent, penalty may please be dropped." 4.3 After considering the submissions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Service Tax. Therefore, I am not inclined to impose any penalty as proposed in the Show Cause Notice by invoking Section 80 of the Finance Act, 1994. There are plethora of cases where the penalties have been waived on the basis of ignorance of the party. In case of Magnum International vs. Commissioner of Customs & Central Excise Bhopal (Final order No ST/57-58/2008-PB, dated 03-04-2008) on the one hand invocation of extended period was justified covering the extended period demand , and on the other hand penalty was waived on the basis of reasonable cause for failure to discharge the Tax liability It has been observed by the Hon'ble CESTAT in the case of CCE vs. Busy Bee (2009) 18 STT 18 392 (CESTAT) that if nonpayment was due to ignorance of law, penalty is not imposable." 4.4 From the above it is clear that appellant do not dispute the liability to pay the service tax and has in fact admitted the liability to pay the service tax. In view of the admission of liability to pay the service tax as per show cause notice, we are left with only one issue. Appellant has before the original authority submitted a calculation chart computing the tax liability. However no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 on merits. I find that the adjudicating authority in this regard has held as under - "The party has submitted in their defence reply that they are ready to deposit the service tax, due as per the chart for calculation of tax submitted with reply. Further, they have requested that being ready to pay the tax and being innocent, penalty may please be dropped. I have gone through records of the case as well as submissions of the party. The party is not contesting that they were engaged in providing of taxable services as discussed in the show cause notice. They disputed only on the quantification aspect, as they have submitted a different chart regarding due of the taxable liability." I find that the appellants have neither contested nor controverted the aforesaid finding On the other hand, have admitted the aforesaid observations in Para 2.2.1 of their present Memorandum of Appeal wherein, they have contended as under - "2.2.1. We filed defence reply dated 28.04.2011 duly acknowledged in Service Tax deptt. on 05.05.2011, challenging mainly the quantification of demand on the ground that gross payments received includes the amount of service tax received from Ms Hindalco I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has granted substantial relief by not imposing any penalty." 4.6 From the order of the First appellate authority also it is evident that appellant failed to provide any document to establish any claim in respect of the calculation chart provided by them. However we find that even if we take the calculation chart provided by the appellant and reproduced in the order of the adjudicating authority the difference in Net Taxable Turnover indicated therein and the in the show cause notice is only for the an amount Rs 40,896.45/-. All other deductions claimed do not form the part value taken for making this demand. Appellant has claimed theses deductions from the gross amount received, which has been taken into consideration while issuing the show cause notice and cannot be deducted seconded time. First appellate authority has in para 6 of the impugned order observed so and we are in complete agreement with the said observation. As appellant has not produced any document to establish their claim for further deduction of Rs 40,896.45/- paid a service tax by Hindalco, the said deduction has not be allowed by the authorities below. No such document evidencing payment of this amount as ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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