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CCE & ST, LTU, Chennai Versus M/s. Saint Gobain Glass India Ltd.

2016 (5) TMI 1244 - CESTAT CHENNAI

Imposition of penalty - Section 78 of the Finance Act, 1994 - Banking and other Financial Services and Sponsorship Service - received from foreign firms who do not have any office in India - liable to pay tax under reverse charge - Held that:- in the instant case the non-payment of tax was on account of bonafide belief and the Revenue had conducted Audits which would go to show that there was in fact no suppression of facts. On the other hand it is found that the judgement of the Tribunal in the .....

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the Central Excise Act, where there is a discretion not to impose penalty when reasonable cause is shown. Therefore, the ends of justice would be met by upholding the order of the Commissioner (Appeals) for the reasons stated above. - Decided against the revenue - Appeal No.ST/41851/2015 - FINAL ORDER No._ 40849 / 2016 - Dated:- 26-5-2016 - SHRI P. K. CHOUDHARY, JUDICIAL MEMBER For the Petitioner : Shri L. Pannerselvam, AC (AR) For the Respondent : Ms. V. Ubhaya Bharathi, Advocate ORDER Revenue .....

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ategory of Banking and other Financial Services to the tune of ₹ 3,27,266/- and a sum of ₹ 7,78,841/- towards Sponsorship Service was also demanded as it appeared that some of the transactions are not in the nature of donations but given under an obligation to get something in return, such as display of banners in sponsors name or entitled for certain privileges; that the respondent assessee is under the jurisdiction of LTU and is well aware of all the statutory obligations, and it w .....

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hat the case law M/s. Atwood Oceanics Pacific Ltd. Vs. CST, Ahmedabad 2013 (32) STR 756 (Tri.-Ahmd.) relied upon by the Ld. Commissioner (Appeals) has not been accepted by the department and a civil appeal has been filed in the Honble Supreme Court and the same has been admitted vide C.A. No. D7374/2013 reported in 2014 (34) STR 3172 (SC); that the respondent assessee while filing the appeal before the Ld. Commissioner (Appeals) had only disputed the levy of equal penalty under Section 78 and d .....

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t be issued by the department; reliance was placed on the judgment of the Apex Court in the case of UOI Vs. Dharmendra Textiles Processors 2008 (231) ELT 3 (S.C). 4. The Ld. Counsel appearing on behalf of the respondent Ms. V. UbhayaBharathi, Advocate reiterated the findings of the Ld. Commissioner (Appeals) and submitted that the tax along with the interest was paid even before issuance of the show cause notice. The fact that the show cause notice sought to appropriate the tax and the interest, .....

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nt in India and in the instant case, entire services have been provided outside India and not received in India and therefore, the recipient was under the impression that there were no liabilities to pay. The learned Counsel had drawn attention to Ground No.9 of the appeal filed by the Department wherein it was stated that the respondent herein had filed an appeal before the Commissioner (Appeals) only against non-imposition of penalty and not against the order confirming the demand of tax by in .....

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hat the show cause notice issued without any tangible evidence and based only on inferences is vitiated by an error of law and prayed for upholding of OIA and rejection of the Revenues appeal on this score alone. In her counter, she also submitted that the Ld. AR was referring to Section 73 (4) but the same is not applicable to this case and it was not raised in their grounds of appeal. 5. In the instant case the issue is on two aspects viz., non-payment of tax under reverse charge for a sum of .....

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d going by the records there is no suppression of facts with an intention to evade payment of tax. On the first aspect viz., non-payment under reverse charge the tax paid is eligible for credit to the respondent themselves and this is enough proof in the facts of the present case that there is no suppression of facts with an intention to evade payment of tax. With regard to the second issue, the contention of the Counsel for the respondent by reading the allegation from the show cause notice tha .....

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y cannot be ruled out. The fact that the respondent has discharged their tax liability would only go to show that there has been no malafide intention to evade the payment of tax. 6. In this case as rightly pointed out by the Counsel for the Respondent, they had in their appeal filed before the Commissioner (Appeals) as a matter of fact raised the plea of non invocation of extended period and the Revenue s contention to the contrary is clearly erroneous. I find that in the instant case there is .....

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o declare does not amount to willful mis-declaration or willful suppression. There must be some positive act on the part of the party to establish either willful mis-declaration or willful suppression. All the particulars were culled out only from the respondent s record. It is also a fact that when the department culls out a case from the record of the assessee, the allegation of suppression is unsustainable. The respondent has raised a specific plea that the Audit parties have visited their un .....

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onafide belief that tax was in fact not payable. In these circumstances, the imposition of penalty is unsustainable. 7. The AR had placed reliance on the judgement of the Honble Supreme Court in the case of Dharmendra Textile Processors reported in 2008 (231) ELT 3 (SC), wherein it was held that the penalty under Section 11AC of the Central Excise Act, 1944 is mandatory if larger period is invoked. Reliance was also placed on the ruling of the Madras High Court in the case of Dhandayuthapani Ca .....

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