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2016 (10) TMI 618 - CESTAT MUMBAI

2016 (10) TMI 618 - CESTAT MUMBAI - TMI - Imposition of penalty u/s 77 & 78 of the Finance Act, 1994 - construction of complex - benefit of doubt and bonafide belief- applicability of section 80 of the act - Held that: - the issue of taxability of construction of complex was under doubt right from beginning and various circulars were issued to clarify the position on taxability of the said services. On the taxability of the services, the bonafide belief of the appellant in non payment of service .....

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for respondent ORDER The appeal is directed against Order-in-Appeal No. PUN-EXCUS-001-APP-070-14-15 dated 18.9.2014 passed by Commissioner (Appeals) Central Excise Pune-I whereby the Ld. Commissioner dismissed the appeal filed by the appellant. The present appeal was filed by the appellant only challenging the penalties imposed under Section 77 & 78 of the Finance Act, 1994. 2. The fact of the case is that the appellant engaged in the construction of complex services which became taxable w. .....

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so paid the late fees for delayed filing of returns. Subsequently, the show cause notice was issued on 18.12.2012 proposing demand of service tax and imposition of penalties. In the adjudication, the service tax demand was confirmed, the amount of service tax already paid was appropriated and penalties under Section 77 & 78 were also imposed. Aggrieved by the original order, the appellant filed appeal before the Commissioner (Appeals), who by the impugned order dismissed the appeal of the ap .....

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tax was also challenged in the following judgments: (i) Magus Construction Pvt. Ltd. Vs. Union of India 2008 (11) S.T.R. 225 (Gau.) (ii) Commissioner of Service Tax Vs. Sujal Developers 2013 (31) S.T.R. 523 (Guj.) (iii) Maharashtra Chamber of Housing Industry Vs. Union of India 2012 (25) S.T.R. 305 (Bom.) In view of the uncertainty on the levy of service tax due to the matter being in litigation in various courts, the many construction industry were not paying service tax on the construction se .....

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tral Excise, Daman 2013-TIOL-886-CESTAT-AHM He submits that since the levy of service tax was not free from doubt, it was a bona fide belief of the appellant that the service tax is not leviable, hence the appellant could not pay the service tax in time. In this regard, the appellant placed reliance of the following judgment: (i) Hindustan Steel Ltd. Vs. State of Orissa 1978 (2) E.L.T.(J 159) (S.C.) (ii) Commissioner of C.Ex. Mangalore Vs. Abharan Motors Pvt. Ltd. 2011 (23) S.T.R. 72 (Tri.- Bang .....

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s. Commissioner of C. Ex. & S.T., Kanpur 2014 (36) S.T.R. 471 (Tri.-Del.) (iii) Fibre Foils Ltd. Vs. Commissioner of Central Excise, Mumbai-IV 2005 (190) E.L.T. 352 (Tri-Mumbai) (iv) Union of India Vs. Rajasthan Spinning & Weaving Mills 2009 (238) E.L.T. 3 (S.C.) He submits that under the given circumstances of the present case the penalty is not imposable invoking Section 80 as held in the following judgments: (i) ETA Engineering Ltd. Vs. Commissioner of Central Excise, Chennai 2006 (3) .....

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ppellant has entertained the bonafide belief for non-payment of service tax is not correct for the reason that the scope of taxable service on construction of complex was expanded on 1.7.2010, by which all the doubts on the taxability of services were cleared. Therefore the appellant should have paid the amount immediately after 1.7.2010, which the appellant failed to do so hence the penalty was correctly imposed. 5. I have carefully considered the submissions made by both the sides. I find that .....

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