TMI Blog2003 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ed into a contract with Rourkela Steel Plant located at Rourkela for providing technical services to RSP, for which purposes, they were to delegate specialists. In terms of the said contracts, all the taxes and duties were to be borne by Rourkela Steel Plant. 3. A dispute arose between the Department and the respondents for levy of service tax for the taxable service being provided by the respondents. They clarified the position and submitted that any tax, if leviable, has to be borne by RSP and also made a request to M/s. Rourkela Steel Plant to make arrangements for payment of Service Tax. After taking the legal opinion etc., the Service Tax was deposited by RSP along with the interest leviable thereon. The matter was taken up f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax is leviable on the services being provided by them, they took up the matter with M/s. RSP and M/s. RSP agreed to pay the amount in question and subsequently, paid the same along with the interest. In the aforesaid circumstances, there was a reasonable cause for alleged failure on the respondents' part. Shri Bagaria, learned Advocate has also referred to a number of decisions to show what would be 'reasonable cause' in a particular set of facts. 6. The Commissioner (Appeals) while setting aside the penalty has observed as under :- "16. Applying the principles laid down in the above judgments it is clear that the Appellant, on the basis of the terms and conditions of the contract with RSP, was under a reasonable belief that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.' 17.Coming to the three decisions relied upon by the Additional Commissioner, the facts and circumstances of the said decisions were totally different. None of the said decisions was involved with a case of non-resident who does not even have any place of business in India. In none of the said decisions, the liability was to be borne by the Indian party as per the terms of the contract itself. Furthermore, in two of the said decisions, that is, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt 973 [ Gujarat Water Supply Sewerage Board v. Unique Erectors ( Gujarat ) (P) Ltd. ] In this judgment, in Para 11, the Hon'ble Supreme Court was pleased to hold inter alia as under :- "It is difficult to give an exact definition of the word, 'reasonable'. Reason varies in its conclusions according to the idiosyncrasy of the individual and the times and the circumstances of which the actor, called upon to act reasonably, knows or ought to know." (c) AIR 1996 Patna 58 ( Commissioner of Wealth-tax v. Jagdish Prasad Choudhary ) - In this full bench judgment of the Hon'ble Patna High Court, in Paragraph 31, it was inter alia held as under :- "Therefore, in the context of penalty provision, the word, 'reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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