IN THE CESTAT MUMBAI BENCH

Kamander Security Services

v.

Commissioner of Central Excise, Nasik

M. V. RAVINDRAN, JUDICIAL MEMBER

ORDER NO. A/1456/C-IV/SMB/2007

APPEAL NO. ST/51/07

October 18, 2007

Section 76, read with section 77 of the Finance Act, 1994 - Penalty - For failure to pay service tax - Period from January, 2000 to September, 2003 - Despite having taken service tax registration from authorities, assessee failed to pay service tax - On being pointed out by revenue, it paid same along with interest on 14-1-2004 i.e. before issuance of show-cause notice - However, adjudicating authority imposed penalty under sections 76 and 77 on assessee and same was paid - On review, Commissioner enhanced penalty amount equal to amount of service tax - However, as per amnesty scheme, if amount of service tax and interest thereof is discharged by assessee before 31-10-2004, assessee would not be liable to pay penalty - Further, Tribunal in CCE v. Bharat Security Services &Worker’s Cont. 2005 (188) ELT 454 (Trib-Delhi) held that said amnesty scheme was applicable even to those assessee who had taken registration but failed to comply with law - Whether in view of above case, impugned order was liable to be set aside - Held, yes [Para 6]

FACTS

The assessee failed to pay service tax for the period January, 2000 to September 2003 despite having taken service tax registration. On being pointed out, the assessee deposited the entire amount of tax liability and interest leviable thereon before the issuance of show-cause notice in 14-1-2004. However, the adjudicating authority appropriated the amount paid towards the service tax and interest and imposed penalty under sections 76 and 77. The assessee had deposited the penalty so imposed. The Commissioner reviewed above order under the provisions of section 84 and enhanced the penalty amount equal to amount of service tax on assessee.

On appeal:

HELD

It was undisputed that the assessee had deposited the entire amount of service tax leviable and interest thereon before the issuance of show cause notice. The amnesty scheme introduced by the Central Government of India as regards the non-imposition of penalty if the amount of service tax and the interest thereof is discharged by the assessee before 31-10-2004 would apply in the case. It was also seen that in an identical issue the Tribunal in the case of CCE v. Bharat Security Services & Worker’s Cont. 2005 (188) ELT 454 (Tribunal) took the view that amnesty scheme is applicable even to those assessee, who had taken the registration but failed to comply with the law. [Para 5]

Accordingly, following the said decision, the impugned order-in-revision was liable to be set aside and the appeal was to be allowed. [Para 6]

CASE REVIEW:

CCE v. Bharat Security Services & Worker’s Cont. 2005 (188) ELT 454 (Trib.-Delhi) - Followed [Para 6]