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M/s. Kripa Outdoor Publicity Versus Customs, Excise and Service Tax Appellate Tribunal, The Commissioner of Central Excise

2015 (12) TMI 1450 - MADRAS HIGH COURT

Delayed filings of return - Penalty u/s 76 - claim of relief for waiver of penalty u/s 80 - outdoor publicity services - Held that:- t the appellant had not furnished any material to substantiate its claim that it was under severe financial hardship. - no materials were made available, by the appellant, to show that the erstwhile partnership firm had been converted into a sole proprietary concern. The service tax payable, by the appellant, for the period, between May 1997 and April 2000, had not .....

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s seen that the decisions relied on by the learned counsel, appearing on behalf of the appellant, are not applicable to the facts and circumstances of the present case. - C. M. A. No. 2072 of 2011 - Dated:- 16-12-2015 - M. Jaichandren And S. Vimala, JJ. For the Appellant : Mr. N. Viswanathan For the Respondent : Mr. Vikram Ramakrishnan JUDGMENT This Civil Miscellaneous Appeal has been filed, under Section 35(G)(1) of the Central Excise Act against the final order, dated 22.11.2010, passed by the .....

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erned, on 26.2.1998, and had also obtained a certificate of registration. Due to the misunderstanding that had developed between the partners of the partnership firm and on account of severe business losses, it could not pay the tax in respect of its business activities and therefore, no returns had been filed, for the period, from May 1997 to March 2000. 3. It has been further stated that the partnership had been dissolved in the month of June, 2000, and it had been made into a proprietary firm .....

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en issued to the appellant demanding the payment of the interest on the belated payment of the taxes, for the period covering, May 1997 to March 2000. A penalty had also been proposed, under Section 76 of the Finance Act, 1994, for the failure of the appellant to pay the tax in time, as required under Rule 6 of the Service Tax Rules, 1994, read with Section 68 of the Act. However, the appellant had replied to the show cause notice, agreeing to pay the interest, at the earliest, and had prayed fo .....

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he Deputy Commissioner of Central Excise (ST), Chennai II Commmissionerate, had passed the order, in Order-in Original No.22/2003, dated 6.10.2003, imposing the maximum penalty, as provided under the Act, stating that no justification had been found for the failure of the appellant to pay the service tax in time, from May 1997 to March 2000. The appellant had filed an appeal against the said order, before the Commissioner of Central Excise (Appeals), Chennai, in Appeal A.1/2005 (M-II), pleading .....

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l Excise (Appeals), the appellant had preferred an appeal before the Customs Excise and Service Tax Appellate Tribunal, in ST/30/2004. The Tribunal had passed the impugned order, dated 19.11.2010, confirming the orders passed by the lower authorities. The Tribunal had passed the said order holding that there were no sufficient grounds to extend the protection from imposing of penalty on the belated payment of tax, by the appellant, under Section 80 of the Act. 7. The Civil Miscellaneous Appeal h .....

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llegal and void, as it has been passed in violation of the principles of natural justice. The Tribunal had erred in not exercising its discretion conferred on it, under Section 80 of the Finance Act, 1994. The Tribunal had not considered the reasons adduced by the appellant for the waiver of the penalty. The Tribunal ought to have considered the fact that the appellant had paid the tax, voluntarily, even though it was belated in nature. As such, the appellant had not attempted to evade the payme .....

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it had been found that the appellant had paid the tax well beyond the due dates. However, no interest had been paid for the belated payment of tax. Therefore, a show cause notice, dated 21.3.2003, had been issued to the appellant, seeking to impose a penalty of ₹ 200 per day, for the belated payment, in terms of Section 76 of the Finance Act, 1994. Vide order in Original, dated 6.10.2003, the penalty had been reduced by the original authority to the minimum amount of ₹ 100 per day a .....

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sioner of Central Excise (Appeals). The first appellate authority, after examining the case records and the submissions made on behalf of the appellant, had passed an order, dated 27.1.2004, rejecting the appeal filed by the appellant, as there was no infirmity in the order under appeal. 11. Aggrieved by the said order, the appellant had approached the the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The Tribunal, vide its order, No.1185/2010, dated 19.11.2010, .....

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pellant is correct in the eye of law. No materials had been furnished by the appellant to substantiate its claim that it was under severe financial hardship. Further, no materials were made available, by the appellant, to show that the partnership firm had been converted into a sole proprietary concern. The service tax payable by the appellant, for the period, from May 1997 to April 2000, had not been paid, for about 3 years. Due to the belated payment of the service tax, the appellant had been .....

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t no penalty should be imposed for technical or venial breach of legal provisions or where the breach flows from the bona fide belief in the manner prescribed by the statute. 13.2. In D.R.GADE Vs. COMMISSIONER OF CUSTOMS, NASIK, 2006 (2) S.T.R. 205 (Tri. - Mumbai), the Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai, had held that the appellant therein had paid the tax amount in full, as well as the interest, which was about 40% of the tax amount. Any pecuniary advant .....

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that the penalty imposed on the assessee would not be sustainable if the assessee proves the reasonable cause for its failure to pay the tax and if there was no contumacious conduct or deliberation or violation of the statute by the assessee. The mere payment of the service tax, which had been done belatedly, and the payment of interest thereon, cannot be taken to be a sufficient cause for the exercise of the discretion vested with the authority concerned, for waiving the penalty under Section 8 .....

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erate as they were operating earlier. The intention behind introduction of provisions of Section 80 of the Finance Act, 1994, is to ensure that the assessees, who had not paid the tax, can make the payment with interest and a lenient view can be taken with regard to the payment of penalty in cases where there is lack of knowledge and reasonable cause for such non payment. 14. The learned counsel appearing on behalf of the second respondent had relied on the decision of the High Court of Gujarat, .....

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