Sanghavi Land Developers Pvt Ltd. Versus CCGST, Mumbai East
Service Tax
2019 (2) TMI 1311 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 21-2-2019
APPEAL NO: ST\/87344\/2018 – A\/85344\/2019
Service Tax
Shri Ajay Sharma, Member (Judicial)
\nAppellant: Shri Jitu Motwani, Advocate
\nRespondent: Shri M.P. Damle, Assistant Commissioner (AR)
\nORDER
\nThe instant appeal has been filed against the impugned order dated 26.3.2018 passed by the Principal Additional Director General, DGPM, WRU, Mumbai in Order-in-Appeal No. MUM\/DGPM\/ WRU\/APP-53\/2017-18. The only issue to be decided in this appeal is whether the Appellants are liable for penalty u\/s. 78 of the Finance Act, 1994.
\n2. The Appellant are engaged in the business of construction of residential complexes as well as renting of immovable property. The said construction activity has been brought under the service tax only w.e.f. 1.7.2010 by way of amendment in the existing Construction of Complex Services under section 65<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n by the Hon'ble High Court, therefore, immediately after pointing out by the said team, in the month of March, 2012 itself the Appellant deposited a sum of Rs. 19,79,927\/- towards service tax applicable on construction services during the relevant period. Thereafter much belatedly a show cause cum demand notice dated 21.6.2016 was issued to the Appellant demanding the service tax amount, which according to the department the appellant had short paid by Rs. 1,47,072\/- for the period from 1.3.2012 to 31.3.2015, alongwith interest u\/s. 75 and penalty u\/s.78 of the Finance Act, 1978. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rvice. – If the Central Excise Officer in the course of any proceedings under this Chapter is satisfied that any person has, with intent to evade payment of service tax, suppressed or concealed the value of taxable service or has furnished inaccurate value of such taxable service, he may direct that such person shall pay by way of penalty, in addition to service tax and interest, if any, payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of service tax sought to be evaded by reason of suppression or concealment of the value of taxable service or the furnishing of inaccurate value of such taxable service : = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n tional validity of the aforesaid amendments. There is no reason not to accept the reasoning given by the ld. counsel for the appellants that they were not aware about the final decision of the Hon'ble High Court, because as soon as the anti-evasion team visited the office of the appellants in the month of March, 2012 and informed them about the decision of the Hon'ble High Court and pointed out that they have not paid the service tax, immediately the appellants in the month of March, 2012 itself paid the service tax of Rs. 19,79,927\/- upto date. Thereafter they are discharging their service tax liability regularly. After the decision of the Adjudicating Authority, the appellant has deposited the balance amount of service tax of Rs. 1,47,072\/- in the month of February, 2017 which remained outstanding due to the calculation error for the period from 1.3.2012 to 31.3.2015. It is clear that the Appellants were under bonafide belief that the writ petition is still pending and that's why the<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ants were engaged in importing of rough diamonds and have paid commission to the brokers through whom they procured diamonds from DTC. If the department was aware of writ petition filed by the appellants and have filed an affidavit in September, 2006, nothing prevented them from issuing protective demand notices in order to safeguard the revenue. As has been already reproduced hereinabove, we find that bulk of the show cause notices were issued by the Revenue Department in 2011 invoking the periods as indicated against the details of individual appellants. In our view, the demand of the Service Tax liability by invoking the extended period in all these cases will not survive as Revenue was well aware of the activity of the appellant of remitting the payments to the broker as commission through proper banking channels, which has been mentioned in writ petition before the Hon'ble High Court. In our considered view, the Revenue Department having filed an affidavit before the Hon'ble High <\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n th interest and we do so, to that extent appeals are rejected. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Sanghavi Land Developers Pvt Ltd. Versus CCGST, Mumbai EastService Tax2019 (2) TMI 1311 – CESTAT MUMBAI – TMICESTAT MUMBAI – ATDated:- 21-2-2019APPEAL NO: ST\/87344\/2018 – A\/85344\/2019Service TaxShri Ajay Sharma, Member (Judicial) Appellant: Shri Jitu Motwani, Advocate Respondent: Shri M.P. Damle, Assistant Commissioner (AR) ORDER The instant appeal has been filed against the impugned order dated … Continue reading “Sanghavi Land Developers Pvt Ltd. Versus CCGST, Mumbai East”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16953","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16953"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16953\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n3. Ld. counsel for the appellant submitted that in the instant appeal they are only challenging the imposition of penalty u\/s.78 of the Finance Act, 1994. He also submitted that the Appellant are willing to deposit the amount of interest u\/s. 75 ibid. According to him, the appellants were not aware about the final order of the Hon'ble High Court and therefore they did not deposit the service tax. But immediat<\/p>\n
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\nProvided that if the value of taxable service (as determined by the Central Excise Officer on assessment) in respect of which value has been suppressed or concealed or inaccurate value has been furnished exceeds a sum of twenty-five thousand rupees, the Central Excise Officer shall not issue any direction for payment by way of penalty wit<\/p>\n
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\n10. This takes us to the issue of penalties imposed on the appellants under various provisions of the Finance Act, 1994. We find that the appellant need not be visited by penalties under the various sections of the Finance Act inasmuch, they could have entertained the bona fide belief as to that their writ petition may be decided in their favour. Invoking the provisions of Section 80 of the Finance Act, 1994, we find that the appellants have made out justifiable reason for setting aside the penalties imposed on them. Invoking the said provisions of Section 80 of the Act, we set aside the penalties imposed on all the appellants herein to that extent the appeals are allowed.”
\n6. The provisions under Section 11AC of the Central Excise Act, 1944 and Section 78 of the Finance Act, 1994, are pari materia. In the matter of Rajasthan Spinning and Weaving Mills (supra) the Hon'ble Supreme Court has laid down that unintentional and<\/p>\n
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