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MESSRS RONAK SHIPPING AND 1 Versus UNION OF INDIA & 3

2015 (8) TMI 1074 - GUJARAT HIGH COURT

Condonation of delay - delay in appeal before the Commissioner (appeals) - whether the case would fall under any of the clarifications made in Answer no.3 by larger bench in the case of Panoli Intermediate (India) Pvt. Ltd. [2015 (7) TMI 303 - GUJARAT HIGH COURT] wherein court has held that in specified circumstances, only, the delay can be condoned - Levy of penalty u/s 78 - Held that:- Unless M/s.Dosti Fabricators was raided and relevant documents were found out by the respondent, there would .....

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SPONDENT : MR DARSHAN M PARIKH, ADVOCATE ORDER (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 b .....

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ate 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 be barred by limitation; (C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to restraint the respondents, their servants and agents from taking any action including any coercive recovery against the petitioners pursuant to order .....

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o condone the delay in preferring the appeal, in which the order of Joint Commissioner, Central Excise, Rajkot dated 31/12/2012 passed under the provisions of Chapter 5 of the Finance Act,1994 (hereinafter referred to as the Act ), was challenged. 4. Since both the authorities below have not condoned the delay, it was argued by Mr.Paresh Dave, learned advocate for the petitioners that the delay may be condoned and the appeal may be heard afresh on merits. It was brought to the notice of this Ben .....

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e Act, 1944, could be extended only upto 30 days as provided by the proviso or the delay beyond the period of 90 days could also be condoned in filing an appeal? (2.) Where a statutory remedy or appeal is provided under Section 35 of the Central Excise Act, 1944 and the delay cannot be condoned under Section 35 beyond the period of 90 days, then whether Writ Petition under Article 226 of the Constitution of India would lie for the purpose of condoning the delay in filing the appeal? (3.) When if .....

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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 a .....

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diction, or A.3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified. B) Resultantly, there is failure of justice or it has resulted into gross injustice. We may also sum up by saying that the power is there even in aforesaid circumstances, but the exercise is discretionary which will be governed solely by the dictates of the judicial conscience enriched by judicial experience and practical wisdom of .....

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pose of condonation of delay in filing the appeal. 6. Aside from the issue of limitation, the questions involved in the present petition and Special Civil Application No.18542 of 2014 were different, therefore, vide order dated 09/07/2015, both these petitions were segregated and Registry was directed to list the present petition separately. Accordingly, the present petition is taken up for final hearing today. Now, therefore this Division Bench has only to consider whether the case of the petit .....

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d submit that the impugned order dated 31/12/2012 passed by the Joint Commissioner of Central Excise imposing demand of service tax along with penalty, 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 .....

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e 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 laving penalty for supressing, etc. of value of taxable services under section 78 of the Act and, therefore, the authority has committed an error in exercise of its .....

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tioners would not fall within a meaning of suppression as held by the Apex Court while dealing with similar provision of section 11(A) of Central Excise Act, 1944. He would submit that suppression means failure to disclose full information with the intent to evade payment of duty/tax. When the facts are known to both the parties, omission by one party to do, what he might have done, would not render it suppression. He, therefore, would submit that the penalty ought not to have imposed by the imp .....

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der may be quashed and set aside. 9. On the other hand, Mr.Darshan Parikh, learned advocate appearing for the respondent No.4 has vehemently opposed this petition and raised objection with regard to maintainability of the present petition since the present petition was filed only with a prayer to get the matter remanded to the appellate authority for fresh consideration. He would submit that entire memo of the petition is based on the aspect of delay in preferring the appeal before the Commissio .....

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l 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 inferenc .....

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mstances and conduct of the petitioners. The petitioners had not come forward to pay any service tax and the authority found out the evasion of payment of service tax only when the assessee company namely M/s.Dosti Fabricators was raided by the respondent authority. By taking us through the impugned order, he would submit that though the petitioners were heard and sufficient opportunity was given for production of details about payment of service tax, as he claimed in the written submission, the .....

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ng from the said office premises. It was found that the petitioners were registered with the service for supply of Tangible Goods Services for getting certain benefit having been involved in the said service. However, during the course of proceedings and as per statement of the partner of the petitioners, it revealed that a barge belongs to petitioner was being given on hire basis to various customers by the petitioners. Such business is subject to payment of service tax, which was not paid by t .....

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petitioners were operating business from the said premises of M/s.Dosti Fabricators. It was also found that petitioner s company owns one self propelled Barge and was providing this Barge on hire to various customers. The said business is subject to payment of service tax under the provisions of Finance Act and particularly 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 finan .....

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s 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 .....

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cess of ₹ 11,164/and secondary & higher education cess of ₹ 5,582/) along with interest of ₹ 32,048/during the course of investigation as detailed below: (amount in Rs.) Year Period Date of payment Service tax Edu. cess SHE Cess Interest Total 2009-10 April,2009 to Sept,2010 3103-2011 2,18,186 4364 2182 15334 2,40,066 2010-11 Jan,2011 to March, 2011 1608-2011 3,40,000 6800 3400 16714 3,66,914 TOTAL 5,58,186 11164 5582 32048 6,06,980 It also appears that the petitioner had .....

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ue to the reason 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 treat it as if they do not have anything further to add on this issue. Therefore, I am deciding the case based on the evidences available on record. Paragraph Nos.12 to 17 of the said order, are relevant to deal with the su .....

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ve 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 .....

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Agro Industries Vs CCE Ghaziabad 2007(210) ELT 183(SC). As already discussed above, since this is a case of suppression of facts with an intent to evade payment of tax, no cum tax benefit can be given. 15. Regarding imposition of penalty under Section 77 of the Finance Act,1994, I find that the noticee have not filed any ST3 return for the period under dispute, though they are well aware of the provisions of law and for such contraventions penalty under Section 77 of the Finance Act,1994 is impo .....

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nt of service tax. Hence penalty under Section 78 of the Finance Act,1994 is liable to be imposed upon them. 17. Further, the fifth proviso to Section 78 provides that if the penalty is payable under this section, then the provision of Section 76 will not apply. I find that the show cause notice covers the period from 200910 onwards. The fifth proviso to Section 78 of Finance Act,1994 has been added w.e.f. 10.5.2008 through a legislative amendment, providing that if penalty is payable under Sect .....

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