STA No.12 of 2009 (O&M) #1#
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH
STA No.12 of 2009 (O&M)
Date of Order: 9.9.2009
Commissioner, Central Excise Commissionerate, Jalandhar
...Appellant
Versus
M/s ESS ESS KAY Engg Co. Ltd
....Respondent
CORAM: HON’BLE MR. JUSTICE M.M. KUMAR
HON’BLE MR. JUSTICE JASWANT SINGH
Present: Mr. Gurpreet Singh, Sr. Standing Counsel, Government
of India (Indirect Taxes) for the appellant.
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
M.M. KUMAR,J
The instant appeal filed under Section 35(G) of the Central
Excise Act, 1944 read with Section 83 of Finance Act, 1994 (for brevity
“Finance Act“)is directed against order dated 13.12.2007 passed by the
Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for
brevity “the Tribunal”).
The Tribunal has upheld the order passed by the Commissioner
(Appeal) setting aside the penalty imposed on the respondent-dealer in
pursuance of Section 77 of the Finance Act. The Commissioner (Appeal)
has found that there was a reasonable cause for the failure to deposit the
amount of service tax within the time prescribed. It has come on record that
the dealer was availing the services of goods transport operators and he was
liable to pay service tax for the period from 16.11.1997 to 2.6.1998. The
amount was payable by 13.11.2003. However, dealer could pay the amount
of service tax along with interest only on 29.10.2004. Accordingly, the
STA No.12 of 2009 (O&M) #2#
Assistant Commissioner in its order-in-original imposed penalty by
rejecting the plea that there was a reasonable cause for the delay. However,
the Commissioner (Appeal) partly allowed the appeal of assessee filed
against the order-in-original passed by the Assistant Commissioner,
whereby period of payment of interest was modified and order of penalty
was set aside by accepting the plea that there was reasonable cause. He has
accepted the view that the dealer did not deposit the service tax earlier
under the impression that the recipients of service was under no obligation
to pay the service tax as per the judgment of Hon’ble the Supreme Court in
Laghu Udyog Bharti v. Union of India, 1999 (112) ELT 365 and that they
were not aware of amendment made vide Notification No.4/2003-ST and,
therefore, it was found that there was reasonable cause for delay.
At the hearing, we asked learned counsel for the revenue the
tax effect, which would be incurred by requiring the dealer-respondent to
pay the penalty. The answer was that the tax effect would not be more than
Rs.30,000/-. Taking into account the meager amount involved, we are not
inclined to admit the appeal to decide the question of law raised. However,
it shall not be taken to mean that we have expressed any opinion on the
question of law concerning payment of penalty under Section 77 of the
Finance Act and the requirements of a reasonable cause under Section 80 of
the Finance Act. We leave those questions open and dismiss the appeal on
the ground that meager sum is involved.
( M.M. KUMAR )
JUDGE
September 09, 2009 ( JASWANT SINGH )
manoj JUDGE