ORDER
M.V. Ravindran, Member (J)
1. This appeal is directed against the Order-in-Appeal dated 16.12.2004 which upholds the confirmation of demand and penalties imposed on the appellants in the Order-in-Original.
2. The relevant facts that arise for consideration are that the appellants are engaged in the business of renting Cab since June, 2000 and got themselves registered as Rent Cab Operator from 6.12.2000. The appellants however, did not file any return for the period June, 2000 to March, 2003 and show cause notice was issued to them, after a visit of the officers to their premises, asking them to show cause as to why demand of service tax of Rs. 1,00,161/- be not demanded from them and why penalty be not imposed on them under Section 76, 77, & 78 of the Finance Act, 1994 for the violation of the provisions of Finance Act in respect of collection of service tax and not remitting the same to the Government. The appellants deposited part of the amount of service tax on 31.3.2004 and contested show cause notice. The adjudicating authority in his Order-in-Original confirmed the amount of duty and imposed penalty on the appellants under Section 76, 77 & 78 and also directed them to deposit the amount of interest as per Section 75. On appeal the appellate authority did not find merit in the appellants’ plea and upheld the Order of the adjudicating authority in to-to. Hence, this appeal.
3. Learned Advocate appearing for the appellants submits that the appeal is directed only against penalties imposed under Section 76 and 78, He is not challenging all the penalties imposed on the appellants. It is the submission that penalty imposed under Section 78 is not imposable on them because there is no fraud, collusion, or mis-statement on the part of the appellants. In respect of Section 76 he submits that the amount of penalty imposed on them for non-payment of service tax is not warranted as they have not been directed by the authorities to produce the documents for verification. In the absence of any such direction they being a small scale operator were not aware of law, hence, a lenient view should be taken. He submits that penalty imposed under Section 77 the same plea is applicable.
4. Learned D.R. on the other hand submits that the appellants have themselves registered with the authorities on December, 2000 and they have collected the amount of service tax from their clients. He submits that having collected the amount from their clients it was the requirement of the law for the appellants to deposit the same with the Government and now it cannot be pleaded that they were not aware of the law. It was submitted by the learned D.R. that the Suptd. in his letter dated 23.5.2002 asked the appellants to submit service tax return but they failed to do so. Hence, he submits that penalties imposed on the appellants are correct and there is no need to reduce the penalties.
5. Considered the submissions made by both sides and perused the record. I find from the record that the appellants have themselves got registered under the provisions of service tax on 6.12.2000. It is also not disputed that the appellants are small scale operators of Renting Cabs inasmuch as lower authorities held that he was owning only less than 15 Nos. of cabs. It was also submitted by both sides that the appellants did not file returns in spite of taking registration certificate from the authorities.
6. It is also found from the record that the appellants have already deposited the entire amount of service tax which has been confirmed against them along with interest thereon for the whole period and have also deposited 25% penalty imposed upon them under Section 78 of the Finance Act, 1994.
7. I find that in this case the appellants have not adhered to the provisions of Finance Act and should have been more careful to file return and to pay service tax to the authorities. But Govt. of India, Ministry of Finance, vide D.O. letter No. 137/39/2004-CX.4 dated 28.9.2004 promoted an amnesty scheme which reads as under:
Hon’ble Finance Minister has launched an extraordinary taxpayer friendly Scheme for registration of those service providers who have not got themselves registered so far. The details of the scheme are enclosed as annexure. This scheme aims to register all service providers on the basis of their declaration and who had earlier failed to register themselves with the department due to ignorance or any other reason with full waiver of penalty. This scheme is effective with immediate effect.
As per the scheme any service provider can make a declaration to the department with regard to his past liabilities towards the service tax and interest payable. Without any inquiry or questions, the departmental authorities will accept the declaration and on the sport give a registration to the service provider. Penal proceedings against the person approaching under this scheme will be completely waived off. This scheme commences with immediate effect and will be operational only upto 30th October 2004 and no extension will be allowed. You should publicise the scheme and organize sufficient numbers of camps to facilitate the service providers who wish to avail of the relaxations given under the scheme, through out your jurisdiction. You should instruct your officers to be courteous and polite, they should not put any uncomfortable questions to the persons opting for the scheme.
From the above reproduced paragraphs of the C.B.E.C. letter it cannot be seen that the Board has granted amnesty even to those who had not got themselves registered with the authorities and not paid service tax. In this case, if the appellants before me would not have got registered in June, 2000, he could have availed the benefit of this amnesty scheme and would have safeguarded themselves against penal action. Since it was the intention of the Government that the people should pay the Service Tax, I find that the appellants have deposited the total amount of Service Tax, although after adjudication on 2.9.2004, would get the benefit of scheme which was introduced by the C.B.E.C.
8. At this stage I would like to make it clear that the appellants accepting the liability to pay Service Tax and interest, having paid the said amount and also 25% of the penalty as provided under Section 78 is not eligible to seek any refund of the penalty which they have already deposited. In view of the above I set aside the impugned Order to the extent of penalty imposed on the appellants under Section 76, and the balance amount of penalty in excess of 25% which was paid by the appellants under Section 78 and penalty imposed under Section 77. Subject to the above modification appeal is allowed.
(Dictated & pronounced in the Open Court.)