CESTAT, NEW DLEHI BENCH C
Baba Motors
V.
Commissioner of Central Excise, Chandigarh (Jallandhar)
MRS. ARCHANA WADHWA, JUDICIALMEMBER
FINAL ORDER NO. 1649 /07 SM (BR)
SERVICE TAX APPEAL NO. 178 OF 2007
NOVEMBER 14, 2007
Section 76, read with sections 75A, 77, 78 of the Finance Act, 1994 - Penalty - For failure to pay service tax - Assessee was an authorised service station of an automobile manufacturer - It neither got registered nor paid service tax for said activities - On investigation made by Department it disclosed amount of Rs.4.65 lakhs received from said manufacturer for services provided against free service coupons and paid service tax thereon - However, from enquiries made from automobile manufacturer it was revealed that amount credited to assessee by automobile manufacturer on account of free service coupon was to tune of Rs.8,44,055, as against amount of Rs.4.65 lakhs disclosed by the assessee during the investigations. - Assessee admitted of said higher amount so received and paid service tax along with interest thereon - However, Assistant Commissioner confirmed penalties under sections 75A, 76,77 and 78 on assessee - Whether since there was no justification or explanation put forth by assessee as to how and why full amount of services provided against free coupons was not disclosed by it during course of investigation, penalty to extent of 100 per cent stands rightly imposed by lower authorities in terms of provisions of section 76 and also penalty imposed under section 75A and 77 - Held, yes - Whether in view of facts and circumstances of cases penalty imposed under section 78 was to be reduced - Held, Yes
The assessee was engaged as an authorised service station of an automobile manufacturer. It did not get itself registered and did not pay service tax. During the course of investigations, it was revealed that the assessee had provided services against free service coupons provided by automobile manufacturer and had collected the amount for that. The assessee paid the service tax on the amount disclosed by it during investigation along with interest. However, on enquiries made from the automobile manufacturer it was revealed that the amount credited to the assessee by automobile manufacturer on account of free service coupon was to the tune of Rs.8,44,055 as against the amount of Rs.4.65 lakhs disclosed by the assessee during the investigations. The assessee admitted having received said higher amount and also paid the remaining amount of tax along with interest. However, penalty proceedings were initiated against the assessee and the Assistant Commissioner confirmed the penalties under sections 75A, 76, 77 and 78 on the assessee. Appeal of the assessee before Commissioner (Appeals) against said imposition penalties was failed.
On appeal:
The assessee had not disputed the confirmation of service tax and
interest. The challenge in the instant
appeal was only to imposition of penalty. It was not disputed that during the
course of investigation, the assessee had disclosed the value of the service
tax as Rs.4.65 lakhs (approx.). It was
upon further investigation conducted by the Department at end of automobile
manufacturer that the exact amount of service tax value received by the
assessee was disclosed. This lead to the inevitable conclusion that the service
tax value was consciously suppressed by the assessees to the extent of almost
50 per cent. There was no justification
or explanation put forth by the assessee as to how and why the full amount of
services provided against free coupons was not disclosed by it during the
course of investigation. It might be observed here that such disclosure was
based upon the figures of account maintained by the assessee. There was no reason for the assessee to give
wrong figures instead of disclosing the exact and correct amount. This fact had clearly indicative of the
assessee mala fides. Therefore,
penalty to the extent of 100 per cent stands rightly imposed by the lower
authorities in terms of the provisions of section 76. The same was accordingly, confirmed along
with confirmation of penalty imposed under section 75A and 77. As regards the penalty imposed under section
78, keeping in view the facts and circumstances of the case, the same was to be
reduced. But the above modification in
the quantum of penalty as indicated above, the appeal was otherwise rejected. (