TMI Blog2015 (8) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... (PER : HONOURABLE MR.JUSTICE A.J.DESAI) 1. Heard Mr.Paresh Dave, learned advocate appearing for the petitioners and Mr.Darshan Parikh, learned advocate appeairng for respondent No.4. Though served, respondent Nos.1 to 3 have chosen not to appear before this Court. 2. By way of the present petition under Articles 14, 19(1)(g), 265, 300-A as well as 226 of the Constitution of India, the petitioners have prayed as under: 13(A) That Your Lordships may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction thereby quashing and setting aside order no. A/11168/2014 dated 02.07.2014 passed by the Appellate Tribunal, OIA No.RJTEXCUS000APP6801314 dated 10.02.2014 passed by the Commissioner (Appeals) and OIO No.122/JC/2012 dated 31.12.2012 passed by the Joint Commissioner of Central Excise; (B) That Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction thereby directing the Commissioner of Central Excise (Appeals), Rajkot to hear and decide on merits the petitioner s appeal filed against OIO No.122/JC/2012 dated 31.12.2012 without considering it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a Writ Petition under Article 226 of the Constitution of India, the order passed by the original adjudicating authority could be challenged on merits? 5. By CAV judgement dated 13/03/2015, Full Bench answered the questions and the matters were ordered to be placed before appropriate Bench for further consideration. The questions were answered in Para-31 of the said CAV judgement, which reads as under: 31. We may now proceed to answer the question ( 1) Question No.1 is answered in negative by observing that the limitation provided under section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days. (2) The second question is answered in negative to the extent that the petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal. (3) On the third question, the answer is in affirmative, but with the clarification that- A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty, is also challenged, on its merits. By taking us through the averments made in para-8 of the petition, he would submit that the case of the petitioners would fall under answer No.3 (A.1 and A.2). On this premise, he would submit that the authority has no jurisdiction to impose penalty u/s.78 of the Act. He would submit that the authority has also exercised the power in excess of its jurisdiction while imposing penalty u/s.78 of the Act. He would submit that though the petitioners were able to establish that they have already paid service tax, the authority has not properly dealt with the case of the petitioners and, therefore, the impugned order is required to be quashed and set aside. He would submit that certain details were produced by the petitioners along with the appeal preferred before the Commissioner (Appeals), however, since the appeal is not decided on merits, resultant effect would be gross injustice to the petitioners, who have paid the service tax, which has now be levied on respondent authority. 8. Mr.Paresh Dave, learned advocate for the petitioners would further submit that the case of the petitioners does not fall in any of the reasons provided for la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. He would submit that the case of the petitioners does not fall under any of the clarification made in para-31 of the judgement of the Larger Bench. He would submit that the authority has neither exceeded his jurisdiction nor has acted in absence of jurisdiction to deal with the case with regard to service tax, which the petitioners are bound to pay, considering the business carried out by him. He would submit that Hon ble Apex Court in the case of Surya Dev Rai V/s. Ram Chander Rai reported in ( 2003)6 SCC 675 has held that writ of certiorari under Article 226 of the Constitution of India, can be issued for correcting gross errors of jurisdiction. He would further submit that it has been held by Hon ble Apex Court in the said decision, that where two inferences are reasonably possible and the subordinate court has chosen to take one view the error cannot be called gross or patent, which would call for any interference under Article 226 of the Constitution of India. He would submit that the case of the petitioners falls under Section 78 of the Act, so far as imposing penalty is concerned. He would submit that the case of the petitioners falls under one of the reasons i.e. sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cularly Chapter No.5 of the Finance Act. The payment of service tax was not made and on asking, it was admitted by partner of the petitioners that the same was not paid due to financial constraint. It also appears from the order that the petitioners had tried to establish that they had paid service tax on different dates and it was submitted that the details would be supplied to the authority, but the same were never supplied to the respondent authority. From whatever documents were found by the authority and produced by the petitioners, the respondent authority has accepted that some amount was paid by the petitioners with regard to service tax. Para 5.6 of the order reads as under: 5.6 On the basis of bills issued for hiring of barges and tugs during the years 200809 (from 16052008 onwards) to 201011, it appeared that M/s.Ronak should have paid service tax of ₹ 23,02,368/( Rupees twenty three lakh two thousand three hundred sixty eight only)(which includes education cess of ₹ 44,705/and secondary higher education cess of ₹ 22,353/) excluding the amount of service tax paid prior to initiation of investigation by the DGCEI. Shri Jumma Sati in his statement d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciding the case based on the evidences available on record. Paragraph Nos.12 to 17 of the said order, are relevant to deal with the submissions made by learned advocate Mr.Paresh Dave about the levy of penalty u/s.78 of the Act and, therefore, the same are produced as under: 12.During the personal hearing, the representative of the noticee had informed that the investigating authorities have not verified all the bills. He promised to give a detailed reply by 17th or 18th September 2012. More than three months has lapsed since the above date but no further submissions have been filed by the noticee. Hence, I decide that they have no more additional submissions to make and in view of the discussions in the preceding paras, I hold the entire demand in the show cause as confirmed. 13. It is seen that the noticee has been evading/ suppressing the information from the department about the taxable services rendered by them under the category of supply of tangible goods service. This was unearthed when a search was conducted in the premises of M/s Dosti Fabricators. Hence I decide that this is a clear case of suppression of facts and hence the demand raised by invoking the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to supply the details about the payment of service tax, it appears that some of the amount had been paid subsequent to initiation of the present proceedings. By written submissions, the petitioners have tried to establish that some amount was paid but as observed by the authority referred hereinabove, no supporting document was produced by the petitioners. The details with regard to show called payment in the year 2009-2010, 2010- 2011 which are alleged to have been paid, but no supporting documents have been produced by the petitioners even before this Court. It appears from the above facts and circumstances that the petitioners were running business for different purposes and for which, they were liable to pay service tax and, therefore, in our opinion, the petitioners have suppressed the above facts from the respondent authority to avoid payment of service tax. Unless M/s.Dosti Fabricators was raided and relevant documents were found out by the respondent, there would be non-payment of huge of service tax, which the petitioners are liable to pay. Therefore, in our opinion, the case is covered u/s.78 of the Finance Act. We are, therefore of the opinion that the case would not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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