OIO No. 64/JC/2011
Dated 30.12.2011
lhek “kqYd ,oa dsUnzh; mRikn “kqYd vk;qDrky;]
dsUnzh; mRikn “kqYd Hkou]
jsl dkslZ] fjax jksM jktdksV-360001
OFFICE OF THE COMMISIONER OF CUSTOMS & CENTRAL EXCISE
RACE COURSE RING ROAD, RAJKOT-360001
F.No V.ST/15-30279/Adj./2010
By RPAD/HAND DELIVERY
Ekwy vkns”k Lka.
Order in Original NO.
64/JC/2011
vkns”k dh frfFk
30.12.2011
Date of Order:06.01.2012
tkjh djus dh frfFk
Date of Issue:-
,e- KkulqUnje
vkns”kdrkZ dk uke :
संयक्
ु त आयक्
ु त
Passed by:
ds lanHkZ esa :
ds0 m-0 “kqYd vk;qDrky;]
jktdksV
M/s. Shreeji Enterprise
Randal Krupa,
Navi Bazar,
Okha, Distt. Jamnagar
dkj.k crkvksa uksfVl la- V.ST/AR-JMR/JC/262/2010
Dated : 18.10.2010
&frfFk
Show Cause Notice No. &
Date.
In the matter of
1gSA
1.
;g izfrfyfi ml O;fDr dks futh mi;ksx ds fy, fu%'kqYd nh xbZ gSA ftls ;g tkjh fd;k x;k
This copy of order is granted free of charges to the person to whom it is issued.
2bl vkns'k ls ;fn dksbZ O;fDr vlarq"V gS rks bl vkns'k ds fo:) fuEufyf[kr dks vihy dj
ldrk gSA&vk;qDr ¼vihy½ lhek ,oa dsUnzh; mRikn 'kqYd] jsl dkslZ fjax jksM jktdksVA
2.
Any person deeming himself aggrieved by this order may appeal against this order to the
Commissioner (Appeals), Customs & Central Excise, Central Excise Bhavan, Race Course Ring
Road, Rajkot.
3vihy dk QkeZ ,l-Vh-&4 nks izfr esa Hkjk tk, ,oa mlds lkFk fu.kZ; dh izfrfyfi ;k lsokdj
fu;e] 1994 dh dye 8 esa fofufnZ"V vuqlkj vkns'k ds fo:) vihy dh izfrfyfi gksuh pkfg,A
3.
The Appeal should be filed in form ST-4 as per Rule 8 of Service Tax Rules, 1994 and it
shall be signed by the person as specified in Rule 3 (2) of the Central Excise (Appeals) Rules,
2001.
4ikVhZ }kjk bl vkns'k dks O;fDrxr izkIr fd, tkus dh rkjh[k ls ;k Mkd }kjk izkfIr dh rkjh[k
ls rhu eghus ds vanj vihy Qkby dh tkuh pkfg,A
4.
The appeal should be filed within three months from the date of receipt of this order.
[Section 85 of the Finance Act, 1994].
5.
5.
blds lkFk fuEufyf[kr dkxtkr gksuh pkfg,A
The appeal should be accompanied by:
¼v½ ,slk vkns'k dh izfrfyfi ;k nwljs dh d izfrfyfi ftl ij uhps n'kkZ, v?khu fu/kkZfjr dksVZ
dh Qhl LVsEi gksuh pkfg,A
(a)
Copy of this order which should bear court fee stamp as prescribed under Schedule 1 of
Article 6 of the Court Fee Stamp Act, 1870, as under:
(i) ;fn lCtsDV eSVj dh jde ;k ewY; ;k ewY; 50 :i; ;k 50 :i;s ls de gks rks :i;s 00-25 gksA
(i) If the amount or value of subject matter is rupees fifty or less, then Rs.0.25;
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OIO No. 64/JC/2011
Dated 30.12.2011
(ii) ;fn lCtsDV eSVj dh jde ;k ewY; ;k ewY; 50 :i; ;k 50 :i;s ls v/khd gks rks :i;s 00-50
gksA
(ii) If such amount exceed Rs.50, then, Rs.0.50 paisa.
¼c½ vihy izfrfyfi ftl ij :i;s 2-50 dh dksVZ Qh LVsEi gksuh pkfg,A
(b) A copy of the appeal should also bear a court fee stamp of Rs.2.50.
6. lsok dj ]naM ¼isuYVh½ vkfn ds Hkqxrku dk izek.k A
Proof of payment of duty, penalty etc., should also be attached to the original form of appeal.
Brief Facts of the Case:
M/s. Shreeji Enterprise, (hereinafter referred to as “the noticee”) are
having their office at Randal Krupa, Navi Bazar, Okha, Distt. Jamnagar,
2.
During the course of Audit for the period 2005-06 to 2008-09 (upto
December-2008), while scrutinizing the records of M/s. Tata Chemicals Ltd,
Mithapur, Distt. Jamnagar, it was noticed that the noticee have provided
services of “scaffolding works” in plant which appear to be taxable under the
category of “Commercial or Industrial Construction Service” under the
provisions of the Finance Act 1994 read with Service Tax Rules – 1994 as
intimated by M/s. Tata Chemicals Ltd, Mithapur, vide their letter no.
TCL/D&T/12/09 dated 19.03.2009.
3.
Therefore, compliance was called for from the said noticee vide office
letters no. JMN/S.Tax/FAR-I-22/08-09 dated 19.11.2008, 15.12.2008 and
21.01.2009. As the noticee failed to comply, a summon was issued vide
letter dated 01.06.2010 to appear and produce required details for carrying
out necessary investigations. The noticee did not appear for deposing
statement or produce the records called for.
It appeared that the noticee
obtained Service Tax Registration bearing No. ABGFS5259LST001 only on
17.01.2007 for “Business Auxiliary Service” but have not applied or obtained
registration under the category of “Construction Services in respect of
Commercial or Industrial Buildings and Civil Structures” for the services that
have been provided to M/s. Tata Chemicals Ltd, Mithapur, during the period
from 2005-06 to 2008-09 (upto December-2008) and thereby they had not
discharged Service Tax liability for the said period with a malafide intention
to evade payment of Service Tax.
4.
It appeared that the activity carried out by the said noticee falls under
the category of “Construction Service” within the definition of the Section 65
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Dated 30.12.2011
of Finance Act, 1994 and subjected to levy of service tax.
The relevant
portion of Section 65 of the Finance Act, 1994 reads as under;
“Commercial or industrial construction service” means —
(a) Construction of a new building or a civil structure or a part thereof; or
(b) Construction of pipeline or conduit; or
(c) Completion and finishing services such as glazing, plastering, painting,
floor and wall tiling, wall covering and wall papering, wood and metal
joinery and carpentry, fencing and railing, construction of swimming
pools, acoustic applications or fittings and other similar services, in
relation to building or civil structure; or
(d)repair, alteration, renovation or restoration of, or similar services in
relation to, building or civil structure, pipeline or conduit,
which is —
(i) used, or to be used, primarily for; or
(ii) occupied, or to be occupied, primarily with; or
(iii) engaged, or to be engaged, primarily in,
Commerce or industry, or work intended for commerce or industry, but does
not include such services provided in respect of roads, airports, railways,
transport terminals, bridges, tunnels and dams”
5.
As elaborated above the noticee had rendered taxable service i.e.
“Construction Service”, to M/s.Tata Chemicals Ltd, Mithapur and others, with
effect from 2005-06 to 2008-09 (upto December-2008) as tabled below and
had earned income to the tune of Rs.50,77,168/- through this service.
However, no service tax was paid for the said services, therefore, the same
was required to be recovered along-with interest under the provisions of
Finance Act, 1994 and Service Tax Rules, 1994. The year wise value of
taxable services provided by the said noticee and the service tax payable
thereon is as follows:Year
Value of taxable service
Service
S. Tax payable
(Rs.)
tax Rate
(Rs.)
2005-06
Nil
Nil
Nil
2006-07
6,41,827
12.24 %
78,560
2007-08
23,41,965
12.36 %
2,89,467
2008-09(upto
20,93,376
12.36 %
2,58,741
50,77,168
-
6,26,768
December-2008)
Total
6.
As per the Section 69 of the Finance Act, 1994 read with Rule 4 of the
Service Tax Rules, 1994 every person providing taxable service should
obtained Service Tax Registration within prescribed time period, however,
the noticee had not obtained the same within prescribed time limit.
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7.
It appeared that the noticee had suppressed the total taxable value of
Rs. 50,77,168/-, as per the above table, and evaded service tax totally
amounting to Rs. 6,26,768/-. Thus, it appeared the noticee by their acts
and/ or omission, as detailed in Para supra, failed to obtain Service Tax
Registration in the category “Construction Services”, within prescribed time
limit and escaped the assessment of tax, failed to disclose wholly and truly
all the material facts required and suppressed or concealed the taxable
service with a willful intention to evade payment of service tax of Rs.
6,26,768/- for the period 2005-06 to 2008-09 (upto December-2008).
Hence the extended period under proviso to Sub-Section (1) of Section 73 of
the Finance Act, 1994 appeared to be invokable in this case for recovery of
service tax.
8.
It appeared that the noticee had contravened the provisions of Section
66 of the Finance Act, 1994 in as much as they had not discharged their
service tax liabilities at applicable rate on the amount against said services
provided by them; the provisions of Section 67 of the Finance Act, 1994 in
as much as they had failed to make the correct valuation of services
rendered by them and escaped the assessment of tax on the said services;
the provisions of Section 68 of the Finance Act, 1994 read-with Rule 6 of the
Service Tax Rules, 1994 in as much as they had failed to collect and deposit
service tax into the account of the Government of India; the provisions of
Section 69 of the Finance Act, 1994 in as much as they had failed to obtain
to Service Tax registration within stipulated time period and to discharge
their Service Tax liability and the provisions of Section 70 of the Finance Act,
1994 read with Rule 7 of the Service Tax Rules, 1994 in as much as they
had failed to assess their tax liability and also failed to file returns.
9.
Therefore, M/s. Shreeji Enterprise, Randal Krupa, Navi Bazar, Okha,
Dist. Jamnagar Distt. Jamnagar was vide show cause notice no. V.ST/ARJMR/JC/262/2010 dated 18.10.2010 called upon to show cause to the Joint
Commissioner, Central Excise Rajkot, as to why:(i) Service Tax along with Education Cess totally amounting to Rs.
6,26,768/-(Rs. Six Lakhs Twenty-six thousands Seven Hundred
Sixty-Eight only) should not be recovered from them under
proviso to Section 73(1) of the Finance Act, 1994.
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(ii) Interest at the applicable rate on the above amount should not
be recovered from them under Section 75 of the Finance Act,
1994.
(iii) Penalty should not be imposed on them under Section 76 of the
Finance Act, 1994;
(iv) Penalty should not be imposed on them under Section 77 of the
Finance Act, 1994;
(v) Penalty should not be imposed on them under Section 78 of the
Finance Act, 1994;
DEFENCE SUBMISSION AND PERSONAL HEARING:
10.
The noticee submitted written reply to the show cause notice vide their
submission dated 02.11.2011, wherein it is, inter alia contended that:
(i)
The amount of Rs.50,77,168/- received by them from M/s Tata
Chemicals Ltd. (hereinafter referred as ‘the company’) was only
for providing scaffolding material to them. A ‘scaffold’ is a
temporary
arrangement
erected
around
a
building
for
convenience of workers. As per rules of the company, any repair
or maintenance work is required to be done above height of
Eight (8) feet, use of scaffold is compulsory and for this purpose,
the company has asked them to provide scaffold at their various
sites. Accordingly, by using pipes, clamps and other materials,
the noticee set up scaffold at the various places. After the
structure is in place, their role ceases and all further activities
by using the scaffold are carried out by the company or any
other person appointed or authorized by the company in this
regard. Further, as per the instruction of the company, they
dismantle their scaffolds and take the same back. The noticee
have also provided photographs of the scaffold supplied by
them.
(ii)
The noticee are not carrying out any construction activity,
whether of a new building, a civil structure or a part thereof,
pipeline or conduit or any repair, alteration, renovation or
restoration of or any similar services in relation to building or
civil structure, pipeline or conduit.
(iii)
Mere supply of scaffold does not tantamount to rendering any
service that can be charged to Service tax under the category
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“Commercial or Industrial Construction Service” defined under
Section 65(25b) of the Finance Act,1994, as amended. Hence,
the impugned show cause notice is liable to be withdrawn in
toto.
(iv)
The show cause notice is also not sustainable on account of the
fact that out of various sub-clauses, i.e. (a), (b), (c) and (d) of
Section 65(25b) of the Finance Act, 1994, it nowhere seeks to
specify the sub-clause under which supply of scaffold is covered
for the purpose of charging Service tax under the category of
“Commercial or Industrial Construction Service”.
(v)
Supply of scaffold does not amount to construction of a new
building or a civil structure or a part thereof as laid out in sub
clause (a) on account of the fact that there is no construction at
all and this is further corroborated by the fact that no new
building or civil structure is coming into existence by the
activities undertaken by the noticee. It also does not amount to
construction of pipeline or conduit as laid out in sub clause (b).
It also cannot be equated with completion or finishing services in
relation to building or civil structure as laid out in sub clause (c).
Finally, it cannot fall under the category repair, alteration,
renovation or restoration of, or similar services in relation to
building or civil structure, pipeline or conduit as laid out in sub
clause (d) as the noticee are not doing any sort of repair,
alteration, renovation or restoration activity. Thus, it was
imperative that before issuing the impugned notice, the activity
of supplying scaffold carried out by them is to be classified under
one or the other sub-clauses of the definition of “Commercial or
Industrial Construction Service” given in Section 65(25b) of the
Finance Act, 1994, as amended, from time to time. As no
classification is proposed, the impugned notice suffers from an
incorrigible defect and therefore, the same is liable to be
withdrawn, in toto.
(vi)
The show cause notice is mis-directed inasmuch as it ought to
have been directed against the persons who provided one or the
other service to the company by using noticee’s scaffolds.
(vii) The noticee were under a bona fide belief that supply of scaffold
was not liable to service tax and hence, they did not charge any
service tax from the company M/s. Tata Chemicals Ltd. Further,
the company is a part of a leading business conglomerate of the
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Dated 30.12.2011
country having the benefit of top-notch tax experts at their
disposal. Therefore, had it been a case where service tax was
chargeable on the scaffolds taken by the company from the
noticee during the period under consideration, they would have
surely advised the noticee to charge service tax for the same, for
which the company would have earned Cenvat Credit. In any
case, no personal gain would have accrued to the noticee.
Therefore, there was no mala fide intention on noticee’s part in
not collecting and paying the Service tax. Hence, in the facts and
circumstances, proviso to Section 73(1) of the Finance Act,
1994, for the purpose of demanding Service tax after expiry of
one year, is not invokable in the present case. They refer to the
decisions of Hon. Supreme Court in case of Gopal Zarda Udyog v
CCE 2005 (188) ELT 251 (S.C.) and CCE v/s Chemphar Drugs &
Liniments, 1989 (40) ELT 276 (S.C.) to support their submission.
(viii) Service tax liability is computed on the basis of figures provided
by the company. However, the noticee have not collected any
service tax from the company. When no tax is collected
separately, the gross amount has to be adopted to quantify the
tax liability treating it as value of taxable service plus service tax
payable. They rely upon the decision of Tribunal in case of CCE,
Patna v/s Advantage Media Consultant [2008 (10) S.T.R. 449
(Tri.-Kolkata)] which has been maintained by the Supreme Court
of India [2009(14) S.T.R. J49 (S.C.)]. They also rely upon the
decision of Tribunal in case of Gem Star Enterprises (P) Ltd. v/s
CCE, Calicut [2007 (7) S.T.R. 342 (Tri.-Bang.)] and the Supreme
Court of India judgement in Maruti Udyog Ltd. [2002 (141) ELT 3
(S.C.)]. The noticee have submitted that taxable amount, to be
computed if any, may be re-computed by deducting the element
of service tax payable.
(ix)
Services provided under construction service are eligible for
abatement of 67% and hence, tax to be charged, if any,
should be charged only on 33% of the total amount, as per
Notification No. 1/2006-S.T. dated 1.3.2006.
(x)
Non-payment of service tax preceded by non-collection of the
tax from the recipient was solely on account of noticee’s bona
fide belief that mere supply of scaffold is outside the purview of
service
tax
levy.
Therefore,
they
request
to
extend
the
provisions of Section 80 of the Finance Act, 1994 and exonerate
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Dated 30.12.2011
them from the penal action proposed against them in the show
cause notice. They
also submit that as per the provisions of
Section 78, as amended by Finance Act, 2008 with effect from
10.5.2008, if the penalty is payable under Section 78, the
provisions of Section 76 shall not apply. Therefore, simultaneous
penalty under Section 76 and 78 is unwarranted.
In view of above, the noticee have reiterated their position that the
activity of supplying scaffold is not covered by “Commercial or Industrial
Construction Service” as defined in Section 65(25b) of the Finance Act,
1994, as amended and hence, they are not liable for payment of Service tax
and requested to withdraw the SCN, in toto.
A Personal hearing was held on 02..11.2011 which was attended by
the authorised representative shri Ravindra manek of the noticee, who
briefed the defence reply dated 2.11.2011 and stated that the scaffolding
supplied is a temporary arrangement and hence cannot be treated as a
construction activity like setting up of a new building, civil structure etc. He
requested to decide the case based on the defence reply.
DISCUSSION AND FINDINGS
11.
I have carefully gone through the entire case records, SCN issued,
defense put forth by the noticee in written submission as well as contentions
raised during personal hearing. I find that the main issue to be decided in
the present case is whether the noticee is liable to pay service tax on
‘scaffolding
work’
under
the
category
of
‘Commercial
or
Industrial
Construction Service” as defined under Section 65(25b) of the Finance Act,
1994.
12.
The noticee has contended the levy of service tax mainly on ground
that ‘Scaffold’ supplied by them to M/s Tata Chemicals Ltd., Mithapur is a
temporary arrangement erected around a building for convenience of worker
for any repair or maintenance work required to be done above height of
eight (8) feet and that
mere supply of scaffold does not tantamount to
rendering any service that can be charged to service tax under the category
“Commercial or Industrial Construction Service” as defined under Section
65(25b) of the Finance Act, 1994.
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Dated 30.12.2011
13.
To appreciate the issue better, I give below the definition of
“Commercial or industrial construction services” as defined under
Section 65(25b) of the Finance Act, 1994 and under Section 65(105)(zzq) of
the Finance Act, 1994 which is effective from 16.6.2005.
“Commercial or industrial construction services” as defined under
Section 65(25b) of the Finance Act, 1994 means —
(a) Construction of a new building or a civil structure or a part
thereof; or
(b) Construction of pipeline or conduit; or
(c) Completion and finishing services such as glazing, plastering,
painting, floor and wall tiling, wall covering and wall papering,
wood and metal joinery and carpentry, fencing and railing,
construction of swimming pools, acoustic applications or fittings
and other similar services, in relation to building or civil
structure; or
(d) repair, alteration, renovation or restoration of, or similar
services in relation to, building or civil structure, pipeline or
conduit,
which is —
(i) used, or to be used, primarily for; or
(ii) occupied, or to be occupied, primarily with; or
(iii) engaged, or
to be engaged, primarily in,
Commerce or industry, or work intended for commerce or industry, but
does not include such services provided in respect of roads, airports,
railways, transport terminals, bridges, tunnels and dams”
“Commercial or industrial construction services” as defined under
65(105)(zzq) of the Finance Act, 1994 means“Taxable services means any service provided or to be provided to any
person, by any other person, in relation to commercial or industrial
construction service.”
From the plain reading of the above definition, it is clear that the same
is exhaustive and covers construction activities of all kinds meant for use for
commerce and industries. The above definition also includes repair,
restoration or alteration or similar services in relation to building or civil
structure. It also include post construction completion and finishing services
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Dated 30.12.2011
such as glazing, plastering, painting, floor and wall tiling, wall papering and
wall coverings, wood and metal joinery and carpentry, if undertaken as
isolated or stand alone contract. Further, construction of pipe line or conduit
including repairs, restoration, renovation or alteration has been included in
the above definition. The word “construction” is defined as follows
- the building of something ,typically a large structure(as per New
Oxford Dictionary of English)
-To make or form by combining or arranging parts or elements (as per
Websters Ninth new collegiate dictionary)
-The act or process of constructing (Chambers dictionary)
Hence it is seen that the definition nowhere provides that such
structure shall be built only with the help of cement, sand, stone etc. Such
structure can be built with iron and steel, plywood etc. Thus the meaning of
the word “construction” is wide enough to cover also the structures which
are built with the help of any metal and other materials. Hence any structure
that has been built even for a temporary period will fall under the category
of construction and any services provided for the same will be deemed to fall
under commercial or industrial construction service.
14.
In the present case on hand, the noticee have provided ‘scaffold’
services to M/s Tata Chemical Ltd., Mithapur. I have gone through the
definition of ‘Scaffold’ as given in ‘Free Online Dictionary, Thesaurus and
Encycloped’ By Farlex reproduced below:
“Scaffold :
- (Miscellaneous Technologies / Building) a temporary metal or wooden
framework that is used to support workmen and materials during the
erection, repair, etc. of a building or other construction.
- A temporary arrangement erected around a building for convenience of
workers”
- A temporary platform used to elevate and support workers and materials
during work on a structure or machine. It consists of one or more wooden
planks and is supported by either a timber or a tubular steel or aluminum
frame; bamboo is used in parts of Asia. Scaffolding may be raised and
lowered by means of cables controlled by a ratchet or electric motor.”
I find that the noticee in their defense submission have also stated
that a ‘scaffold’ is a temporary arrangement erected around a building for
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Dated 30.12.2011
convenience of workers. Hence as per the discussion in the previous para
the scaffolding is a construction and any service provided for the same will
fall under “Commercial or industrial construction service”.
15.
Further, with reference to this office letters F. No. V.ST/15-302/Adj/10
dated 2.11.2011 and dated 21.12.2011, the Superintendent, Service Tax
Range-Jamnagar vide his letter F. No. JMN/S.Tax/FAR-I-22/2009-10 dated
26.12.2011 submitted that “the noticee is engaged in arranging a temporary
platform of pipes, on which workers sit or stand when performing tasks at
height above the ground for convenience and safety of workers while
construction of new buildings within the plant or renovation of the existing
civil structures including repairing of plant and this type of work termed by
them as “Scaffolding works”.
16.
From the definition of “Commercial or industrial construction service”
as provided under Section 65(25b) of the Finance Act, 1994 and under
Section 65(105)(zzq) of the Finance Act, 1994, definition of “Scaffold” as
given in ‘Free Online Dictionary, Thesaurus and Encycloped By Farlex, the
noticee’s contention and verification report of Range Superintendent, I hold
that the ‘Scaffold’ service
provided by the noticee to M/s Tata Chemicals
Ltd. is classifiable under the definition of “Commercial or industrial
construction service”.
The noticee has argued that there was no malafide intention on their part
to evade payment of tax and that their client being a top notch company
would have advised them if any tax liability was there in the present matter.
The reasoning given by the noticee cannot be accepted as an excuse for non
payment of tax. As a service provider the liability to pay tax vests with the
noticee and he cannot take umbrage that they were not briefed by the
service recipient. The act of non payment of tax would not have been
noticed if the audit of the service recipient had not taken place. Hence the
only conclusion that can be arrived at is that there was a suppression of
facts by the noticee and the extended proviso has been rightly invoked in
this case. For substantiating my reasoning for upholding the invocation of
extended proviso I rely upon the following case laws.
a) Commissioner
of
central
excise,
Surat
-1
Vs
Neminath
fabrics-
2010(256)ELT 369 HC
b) Commissioner of central excise ,Vishakapatnam Vs Mehta $Co 2011-TIOL
-17-SC-CX
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Dated 30.12.2011
c)
M/s Rajasthan spinning mills 2009(238) ELT3(S.C)
The noticee has also argued that the cum tax benefit has to be given if the
amount of demand is confirmed. Cum tax benefit cannot be granted in cases
involving fraud, collusion, willful mis statement and suppression of facts with
an intent to evade payment of tax. I rely upon the decision of the Tribunal in
the
case
of
Dhillon
cooldrinks&Bevarages
Ltd
Vs
CCE
Jalandhar
2011(263)ELT 241(Tri –Del) which has placed reliance on the decision of the
Honble supreme court in case of Amrit agro industries Vs CCE Ghaziabad
2007(210)ELT 183(SC).As already discussed above since this is a case of
suppression of facts with a intent to evade payment of tax no cum tax
benefit can be given.
The noticee has argued that penalties under section 76 and section 78
cannot be imposed simultaneously in view of amendment made in the
Finance act in the year 2008.
I find that the period pertaining to the
demand is from 2005-06 t0 2008-09 .Mensrea has been proved in this case.
As the amendment to the act has been made subsequent
to the demand
period I rule that penalties under both secton 76 and 78 are imposable in
this case. My stand is supported by the decision of the High court of Kerala
in the case of Assistant commissioner of central excise Vs Krishna poduval
2006(1)S.T.R 185(KER) and Commissioner of central excise ,Chandigarh Vs
Grewal trading company -2010(18) STR 350(Tr-Del).The noticee is also
liable for imposition of penalty under section 77 for non registration with the
department even though he was providing taxable services.
17.
In view of my findings above, I pass the following order
:: ORDER ::
(i)
I confirm the demand of service tax amounting to Rs. 6,26,768/not paid by the noticee, M/s Shreeji Enterprise under section 73
(1) of the Finance Act, 1994;
(ii)
I demand payment of interest at appropriate rate on the aboveconfirmed demand under section 75 of the Finance Act, 1994;
(iii)
I impose a penalty of Rs.200/- per day or two percent per month
whichever is higher on the noticee, under the provisions of sections
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OIO No. 64/JC/2011
Dated 30.12.2011
76 of the Finance Act, 1994; starting with the first day after the
due date till the date of actual payment of service tax, provided
that the total amount of the penalty payable in terms on this
account shall not exceed the service tax payable as confirmed at sl
no (i).
(iv)
I impose a penalty Rs.5000/- on the noticee, under the provisions
of Section 77 of the Finance Act, 1994.
(v)
I impose a penalty of Rs
6,26,768/- on the noticee, under the
provisions of Section 78 of the Finance Act, 1994. If the demand
and interest as confirmed at Sr.No. (i)and (ii) is paid within thirty
days from the date of communication of this order, then the
amount of penalty liable to be paid under Section 78 shall be
twenty five percent of the service tax so determined provided the
reduced penalty is also paid within 30 days of communication of
the order.
(M. GNANASUNDARAM)
JOINT COMMISSIONER,
F. No. V.ST/15-302/Adj./10
By Regd. Post A.D.
To,
M/s. Shreeji Enterprise
Randal Krupa,
Navi Bazar,
Okha, Distt. Jamnagar.
Copy to:
1. The Assistant Commissioner (RRA), Central Excise, Rajkot.
2. The Deputy Commissioner, Service Tax Division-Rajkot.
3. The Superintendent, Service Tax Range, Jamnagar.
4. Guard file.
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