IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. IV
Appeal No. ST/86515/13
(Arising out of Order-in-Appeal No. US/956/RGD/2013 dated 31.12.2012 passed by the Commissioner of Central Excise (Appeals), Mumbai-II).
M/s Shree Vaibhav Laxmi Co.
Commissioner of Central Excise, Raigad
Shri V.S. Sejpal, Advocate for appellant
Shri S.J. Sahu, AC (AR) for respondent
SHRI RAJU, MEMBER (TECHNICAL)
Date of Hearing: 24.02.2017
Date of Decision: 17.03.2017
The appellants, M/s Shree Vaibhav Laxmi Co., are engaged in providing Manpower Recruitment and Supply Services. The appellants were collecting and paying Service Tax for most of the service provided by them. However, in respect of certain services they were under the impression that they are entitled to Notification No. 8/2005-ST. In respect of such services, the appellant did not collect and pay the Service Tax to the Revenue. However, as soon as the matter was pointed out to the appellant, they paid the Service Tax along with interest before the issue of show-cause notice. However, the demand was confirmed and penalty was imposed on the appellant. The appellants are not contesting the confirmation of demand, however, they are seeking leniency on invocation of Section 80 of the Finance Act, 1994 for setting aside the penalties imposed on them.
2. Learned Counsel for the appellant argued that they were under bona fide belief that they are entitled to Notification No. 8/2005-Service Tax. However, when it was pointed out that they are not entitled to the said notification, they immediately paid the Service Tax along with interest. He argued that this duty demand was merely Rs.2 lakhs, however, they had during this period paid the Service Tax in excess of Rs.10 to 15 lakhs. He argued that there was no mala fide intention and it was under bona fide belief. In these circumstances, it was argued that the penalty imposed on them may be waived.
3. Learned AR relied on the impugned order.
4. The appellants have contended that they were under the bona fide belief that they are entitled for benefit of Notification No. 8/2005-ST. I find that in the facts and circumstances of the case, it is possible. The noticee have shown their bona fide intention by depositing the duty as soon as they pointed out that they are not entitled to such exemption. It is also seen that the noticees were collecting and paying Service Tax properly in respect of other services provided by them to other clients. In these circumstances and considering the substantial facts of the claim, I am inclined to invoke Section 80 and set aside the penalty imposed on the appellant. The appeal is partly allowed in the above terms.
(Pronounced in Court on 17.03.2017)