2018 (6) TMI 924 – CESTAT MUMBAI – TMI – Penalties u/s 77 and 78 – GTA Service – non-payment of Service Tax – appellant had incurred certain expenditure towards outward transportation of finished goods to various buyers including the department of railway – Held that:- Appellant is engaged in the excisable activity as well as payment of service tax on inward GTA. Being organized manufacturer, it cannot be expected that they are not aware about the levy of service tax on outward transportation. There is no different law for levy of service tax on GTA either it is inward transportation or outward transportation, levy of service tax on GTA is under common law. Therefore, contention of the appellant that being outward transportation they were under bonafide belief that the service tax payable by the recipient of the goods has no force.
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The appellant could not make out the case of reasonable cause for non payment of service tax on outward transportation – penalties upheld – appeal d
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ervice. On being pointed out, the appellant made the payment of service tax alongwith interest on 3-5-2014. The department issued a show cause notice dated 21-8-2004, the adjudicating authority confirmed the demand alongwith interest and imposed penalties under Section 78 and 77 of the Finance Act. Being aggrieved by the Order-in-Original appellant filed appeal particularly for waiver of penalty imposed under Section 78 by invoking Section 80. Ld. Commissioner(Appeals) upheld the Order-in-Original and dismissed the appeal of the appellant, therefore appellant is before me for setting aside the penalty under Section 78. 2. Shri. Vinay Jain, Ld. C.A. for the appellant submits that non-payment of service tax is due to bonafide belief that in case of outward transportation, recipient of the goods is required to pay service tax, therefore they have not discharged the service tax. It is admitted fact that appellant have been paying service tax on the inward transportation regularly. The cont
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e by the recipient of the goods has no force. It is also fact that appellant have not declared taxable value of outward transportation in their monthly ST-3 returns. The contention of the Ld. Counsel is also that there is Revenue neutralilty in case if service tax is paid on outward transportation then appellant is entitled for Cenvat credit. In my view this contention is misleading for the reason that after 1-4-2008 when the input service definition amended and term service provided for removal of goods from place of removal was amended up to the place of removal . Accordingly, it was crystal clear that Cenvat credit on outward transport was not admissible therefore this contention is of no help to the appellant. From the facts above discussed, I find that appellant could not make out the case of reasonable cause for non payment of service tax on outward transportation. Accordingly, I uphold penalties under Section 77 and 78, impugned order is upheld, appeal is dismissed. (Pronounced
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