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2017 (2) TMI 208 - CESTAT MUMBAI

2017 (2) TMI 208 - CESTAT MUMBAI - TMI - Imposition of penalties u/s 76, 77 and 78 of the Finance Act - the appellant has discharged the entire service tax liability for the period 18.04.2006 to 31.07.2010 along with interest thereof during the course of investigation itself - whether imposition of penalty justified? - Held that: - appellant has already paid entire tax liability along with interest hence the provisions of Section 73(3) of the FA, 1994 gets attracted in this case - SCN for penalt .....

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ant for imposition of penalties - penalties set aside - appeal allowed - decided in favor of appellant. - ST/324/12 - A/85479/17/STB - Dated:- 11-1-2017 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri L. Badrinarayanan, Advocate for appellant Shri D. Nagvenkar, Addl. Commr (AR) for respondent ORDER Per M. V. Ravindran This appeal is directed against order-in-original No. 27/ST/SB/2011-12 dated 21.02.2012. 2. Heard both sides and perused the records. 3. The is .....

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ent of service tax liability on the said amount paid by them during the period in question. The show-cause notice also sought to demand interest and also seeks to impose penalties. Adjudicating authority after following due process of law dropped the demands raised for the period 01.01.2005 to 18.04.2006 holding that the judgement of Indian National Ship Owners Association 2009 (13) STR 235 (Bom.) and upheld by the Hon ble Apex Court in 2010 (17) STR J-57 and confirmed the demand raised for the .....

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s Circular dated 17.09.2004 and the judgement in the case of Reliance Industries Ltd. 2016 (44) STR 82 (Tri. Mum) covers the issue in their favour. He relied upon the jugement of the Tribunal in their own case reported at 2006 (3) STR 716 (Tri. Mum) and also the following cases:- 1. Rochem Separation Systems (India) Pvt. Ltd. 2015 (39) STR 112 (Tri. Mum) 2. Jain Irrigation Systems Ltd. 2015 (40) STR 752 (Tri. Mum) 3. Indian Hotels Co. Ltd. 2016 (42) STR 927 (Tri. Mum) 6.1 It is his further subm .....

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7. Learned D.R. while defending the order of the adjudicating authority submits that on merits appellant had not put up the defence before lower authority which is being sought to put up today. It is his submission that the appellant had not intimated the payment of this amount to their parent organisation or sister concern and hence there is suppression. It is his submission that the law is clear that the appellant should be discharged the service tax liability on their own. The CBEC vide Circu .....

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se of investigation itself. The said amounts deposited by the appellant are appropriated by the adjudicating authority towards the tax liability and interest. Since the appellant is not seriously contesting the tax liability and the interest thereof, we uphold that part of the order. 8.2 As regards the penalties imposed under Section 76, 77 and 78 of the Finance Act, we find that the entire argument of the learned D.R is that adjudicating authority imposed the penalties as the appellant had supp .....

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ervices but is only a recipient of service. It is noticed that the ST-3 returns which are prescribed do not have any column to show or indicate the receipt of the services from outside till it was enacted in the Finance Act, 1994. In any case we find that the appellant being recipient of the service there was no provision in the Finance Act, 1994 to declare such receipt of services for discharge the tax liability till the enactment of Section 66A. 8.3 Further it is noticed that the discharge of .....

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hat time since there could be prevalent confusion we hold that appellant could have entertained a bonafide belief as to whether to discharge tax or otherwise. In the case in hand appellant has already paid entire tax liability along with interest hence the provisions of Section 73(3) of the Finance Act, 1994 gets attracted in this case. Looking at the case from yet another angle, the entire exercise of demand of tax on reverse charge is a revenue neutral situation. Undoubtedly the appellant coul .....

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1 the Bench held as under:- 6. We have carefully gone through the facts of the case and considered the submissions of both sides. It is undisputed that the Service Tax was paid by the appellant after the issue of the show cause notice and before the passing of the adjudication order. The appellant relies heavily on the judgments cited. Revenue relies on the decision of the Apex Court in the case of Kitply Industries (supra). We note that the Apex Court, after considering the Larger Bench decisio .....

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ould not be an acceptable defence : (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee s manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. International Auto Products (P) Ltd. and endorse the proposition that once an assessee .....

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