Appeal dismissed by High Court Bombay holding that under Section 80 of Finance Act, 1994, imposition of penalty is avoidable due to reasonable cause when there is divergence of view on service tax classification.
Appeal dismissed. Order dated 5th April 2016 of the Tribunal not imposing penalty remains valid.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
2-CEXA-192-17.doc
Sharayu Khot .
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO. 192 OF 2017
The Commissioner of Service Tax-VI …Appellant
Versus
M/s. Shreenath Motors Pvt.Ltd. …Respondent
Ms. P.S. Cardozo, for the Appellant.
Mr. R.G. Sheth a/w Ms. Pinky D. Chainani, for the Respondent.
CORAM : M.S. SANKLECHA & RIYAZ I. CHAGLA, JJ.
DATE : 19 September 2018
ORDER :
1994 (“ the Act ”) read with Section 35G of the Central Excise
Act, 1944 challenges the order dated 5th April 2016 passed by
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Customs, Excise and Service Tax Appellate Tribunal (for short
“ the Tribunal ”).
states that the challenge in the present Appeal to the impugned order dated 5th April 2016 is only to the extent that it holds that no penalty is imposable. The finding on quantum is accepted by the Revenue.
and in law was the Tribunal right in setting aside penalty imposed under Sections 76 and 78 of the Act after confirming the demand of service tax?
(ii) Whether in the facts and circumstances of the case
and in law was the provisions of Section 80 applicable in cases involving suppression of facts
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fraud etc.?
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The Respondent resisted the Show Cause Notice. However, the Additional Commissioner of Central Excise by an order dated 14th June 2010 confirmed the Show Cause Notice and also imposed penalty under Sections 76 and 78 of the Act.
Tribunal. The impugned order placed reliance upon the decision
12009 (14) STR 289 (Bom)
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of its co-ordinate Bench on South City Motors Ltd. Vs. Commissioner of Service Tax, Delhi2 to hold on merits that the service tax would be payable under the head “ business auxiliary service ” and introduction of another head “ business support service ” would not detract from the fact that these services continued to be classified under the head “business auxiliary service”. Thus, the impugned order restored the order of the Additional Commissioner to hold that the tax of Rs. 20.72 Lakhs is payable under the head “ business auxiliary service ”. However, in these facts, the impugned order of the Tribunal held that no penalty can be imposed. Thus, in view of there being lack of clarity as to whether or not these services as rendered by the Respondent are classifiable under business auxiliary service. In fact, the decision in South City Motors Ltd. (supra) had also held that in view of contrary decisions, no malafide or element of suppression, mis statements, etc. could be said to arise. Therefore, the impugned order holds that no penalty is in these facts is imposable.
22012 (25) STR 483 (Tri.Del.)
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support of the Appeal submits that once the duty payments has been confirmed, the penalty should have been imposed. This as the notice was issued under the proviso of Section 73 of the Act.
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2016 of the Tribunal not imposing penalty is one on facts, no substantial question of law arises. This is so as the impugned order is not shown to be perverse in any manner. Hence, not entertained.
[RIYAZ I. CHAGLA J.] [M.S. SANKLECHA, J.]
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2 issues framed by the court
Whether the Tribunal was right in setting aside penalty imposed under Sections 76 and 78 after confirming the demand of service tax.
Whether the provisions of Section 80 are applicable in cases involving divergence of view or lack of malafide intent.
Colour shows how this judgement treated each authority
Indian National Shipowners' AssociationReferred¶37
Indian National Shipowners' Association
South City Motors Ltd. Vs. Commissioner of Service Tax, DelhiRelied on¶44
2009 (14) STR 289 (Bom)
6 provisions across 2 enactments
The Commissioner of Service Tax-VI
M/s. Shreenath Motors Pvt.Ltd.
M.S. Sanklecha
Riyaz I. Chagla
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
