2019 (1) TMI 509 – CESTAT MUMBAI – TMI – Penalty u/s 78 – non-payment of service tax collected for providing telecom services and work contract services – short payment for other period – cash crisis/ fund shortage was cited as the ground for such non-discharge of duty liability but on 18.08.2011 and 19.08.2011, the appellant was able to discharge the entire amount, which is just within two days from the date of raid conducted by the respondent department – intent to evade or not – Held that:- Appellant was not fling ST-3 returns and would have continued to evade service tax by suppressing material facts, had there been no intervention by the department. This being the factual aspect, it cannot be said that appellant had a bonafide intention to discharge duty liability and it could not do so due to incapacity – also, no material is forthcoming that appellant was ignorant of its duty liability and had in fact furnished its statement by way of ST3 returns to the department indicating it
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(Judicial) Ms. Kranti Rathi, Advocate with Shri J.R. Gawde, Consultant for the appellant Shri Dilip Shinde, AC (AR) for the respondent ORDER Imposition of penalty under Section 78 of the Finance Act, 1994 against non-payment of service tax collected for providing telecom services and work contract services by the adjudicating authority which has attained finality in the order of the Commissioner (Appeals) is assailed by the appellant company before this forum. 2. Brief fact of the appellant s case is that it has been providing works contract services and telecommunication services since 03.11.2006. It has provided services like laying of cables and dock lines for telecommunication companies namely Tata Telecommunications, BSNL etc. as its major clients. Anti-evasion wing of the appellant department, upon collection of intelligence report, visited the office premises of the appellant, inspected its documents and found non-payment of service tax collected to the tune of ₹ 47,65,67
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e before the Commissioner (Appeals), the appellant has filed this appeal in the Tribunal. 3. In the memo of appeal and during course of hearing of the appeal, ld. Counsel for the appellant Ms. Kranti Rathi submitted that appellant was not extended the benefit provided under Section 73(3) of the Finance Act, 1994 after payment of duty, interest and penalty component accordingly and was put to show-cause almost two years after the visit of the departmental officials. In citing judicial decisions in Ford India Pvt. Ltd. vide Final order no. 40182- 40183/2018 dated 23.01.2018, CCE vs. Mahindra & Mahindra Ltd. 2018-TIOL-187-SC-MUM-CX, Thirumurugan Enterprises 2015 (14) STR 681 (Mad.), A.N. Impex 2016 (42) STR 793 (Bom), Amway India Enterprises Pvt. Ltd. 2015 (39) STR 1006 (Tri-Del), Vista Infotech 2010 (17) STR 343 (Tri.Bang), S.K. Electro Engineers 2015 (39) STR 686 (Tri Mum), Royes Inds Ltd. 2016(344) ELT 466 (Tri-Hyd), Pragathi Concrete Products (P) Ltd. 2017 (50) STR 92 (SC), CCE Na
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on team had not raided the premises of the appellant, the fact of suppression by way of evasion of tax would not have been known. Referring to the order passed by the Commissioner (Appeals) in para 6.1, 6.2 and 7 where reference to order-in-original is made by the Commissioner (Appeals), ld. AR argued that the appellant had collected service tax amount during the period April 2010 to June 2011 but had not deposited the same in government exchequer nor disclosed the same on its own to the department and the statement of one of its partners indicates that such service tax liability was not discharged due to cash flow and fund problem which itself indicates that tax liability was well within the knowledge of the appellant firm who had intentionally withheld the same for which extended period was rightly invoked that needs no interference of the appellate Tribunal. 5. Heard from both sides at length and perused the case records and relevant judicial decisions submitted by adversaries. On p
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er ground cited by the appellant in placing reliance to the statement of the partner is that they did not get payment against work done for Tata Telecommunications but nowhere in the reply to the show-cause notice or personal hearing, they had established that in between raid conducted on 16.08.2011 and payment made on 18.08.2011 the appellant had in fact received such payment and promptly discharged its duty liability. Further, appellant wants its case to be covered under Section 73(3) but to being it to its preview, the fact of duty liability should not have been in its knowledge and should have been brought to its notice by the central excise officer. In that context, no such material is forthcoming that appellant was ignorant of its duty liability and had in fact furnished its statement by way of ST3 returns to the department indicating its duty liability. 6. Section 78 requires that such fact of wilful suppression, misstatement etc. had to be established by the department on whom
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