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2016 (7) TMI 637 - CESTAT CHENNAI

2016 (7) TMI 637 - CESTAT CHENNAI - TMI - Levy of penalty u/s 77 & 78 of the Finance Act, 1994 - validity of invocation of Section 80 by learned Commissioner (Appeals) for setting aside penalties while confirming the demand of service tax on import of services under reverse charge - Held that:- It is only with introduction of Section 66A of the Finance Act, 1994 there was clarity and the judicial decisions as stated supra brought in clarity only from 2009 onwards. It cannot therefore be stated t .....

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HRI P.K.CHOUDHARY, JUDICIAL MEMBER Shri L. Paneerselvam, AC (AR), For the Appellant Ms. Padmavati Patil, Advocate, For the Respondent ORDER Revenue has filed this appeal against impugned Order-in-Appeal No.147/2011 dt. 19.9.2011 passed by Commissioner of Central Excise (Appeals), Chennai. The issue relates to imposition of penalties imposed on the respondent under Section 77 & 78 of the Finance Act, 1994. 2. The brief facts of the case are that M/s.Ponds Exports Ltd., the respondent herein a .....

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price etc Thus, it appeared that as per Rule 2 (1) (d) (iv) of the Sales Tax Rules, 1994, the respondent being the recipient of the Business Auxiliary Service (BAS, for short) provided by a person from abroad, was liable to pay service on the BAS received by them during aforesaid period. Hence a show cause notice dt.30.1.2009 was issued to them proposing to demand service tax of ₹ 43,69,662/- under Section 73 (1) of the Finance Act, 1994 along with interest under Section 75 besides propos .....

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the demand of ₹ 24,01,066/- with interest. He, however, set aside penalty under Section 77 & 78, by invoking Section 80 of the Finance Act. Hence the Revenue has filed the present appeal seeking restoration of OIO and for setting aside OIA. 3. Shri L. Paneerselvam, A.C, Ld. A.R appearing on behalf of appellant-Revenue submits that invocation of Section 80 by learned Commissioner (Appeals) for setting aside penalties is not proper as the respondent failed to prove their bonafides with .....

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epartmental officers not verified the documents and other details. Therefore, invocation of extended period is justifiable in this case. The learned adjudicating authority is right in imposing a higher penalty under Section 77 as the respondent took out registration only on 28.1.2009 as against the date of introduction of levy i.e. 18.4.2006, thereby they are liable to penalty of ₹ 200 per day. Respondent being a star exporter, and, the plea of bonafide, cannot be accepted and therefore in .....

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tice, they discharged their entire tax liability on 05.02.2009 by paying part payment of ₹ 17,23,400/- on 30.1.2009 and the balance ₹ 9,11,499/- on 5.2.2009. The delay in payment of tax was not intentional but due to pendency of the tax dispute before Hon'ble Bombay High Court which was ultimately settled only on 11.12.2008 as reported in the case of Indian National Shiponwers Association Vs UOI - 2009 (13) STR 235 (Bom.). Therefore, there is reasonable cause shown as rightly rec .....

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Steel Ltd. Vs CCE & Cus., Surat-I-2009 (13) STR 579 (Tri.-Ahmd.) (4) CCE Ahmedabad-II Vs Reclamation Welding Ltd.-2014 (308) ELT 542 (Tri.-Ahmd.) (5) Jay Yuhshin Ltd. Vs CCE New Delhi-2000 (119) ELT 718 (Tribunal-LB) 4.1 She also submits that during the relevant period, the Section 77 mandated imposition of a maximum penalty of ₹ 1000/- only. If at all, penalty imposable under Section 77, it cannot exceed ₹ 1000/-. Therefore, imposition of penalty of ₹ 2,03,200/- is not at .....

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P) Ltd. Vs CCE Salem-2010 (17) STR 525 (Tri-Chennai) (v) Bharat Forge Ltd. Vs CCE Pune-III-2016-TIOL-12-CESTAT-MUM. 5. In counter, Ld. A.R submits that respondent being a star exporter, having known the aspect of revenue-neutrality situation should have made payment of service tax. 6. I have carefully considered the submissions of both sides and perused the records. In this appeal, there is no dispute on the tax liability which stands discharged by the respondent along with interest. The only su .....

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lay in the payment of tax was unintentional and there were a lot of disputes as to whether tax was payable under reverse charge. Although Section 66A of the Finance Act, 1994, came into effect from 18/04/2006, the contention of the Counsel that there were doubts till decision of the Bombay High Court which was eventually decided by the Supreme Court, on 14/12/2009, in the case of Indian National Shipowners Association Vs UOI (supra) cannot be faulted. It cannot be said that the issue was absolut .....

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a revenue-neutral situation should not be lost sight of. This is a case where the tax paid by the Respondent is eligible for credit for themselves. It is, therefore, very clear that when the situation is revenue-neutral, the aspect of malafide fails. I also find that the decision of Mumbai Tribunal in the case of Sterlite Industries (India) Ltd. Vs. CC & C.Ex Vapi (supra), has been followed by the Chennai Bench in the Sundaram Industries Vs CCE Madurai- 2007 (209) E.L.T. 369 (Tri. - Chennai) .....

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