PrideCo Commercial Projects Pvt. Ltd. Vs Commissioner (CESTAT Kolkata)
Summary: M/s.PrideCo Commercial Projects Pvt.Ltd. had provided Commercial Construction Service to West Bengal Housing Infrastructure Development Corporation (WBHIDCO) during 2009-10 to 2013-14. A Show Cause Notice dated 26.08.2014 demanded Service Tax of Rs.30,60,658/- on the ground that the appellant had not discharged the Service Tax liability. The appellant explained that WBHIDCO had specifically informed it that the Service Tax would be borne by WBHIDCO. On that basis, the appellant remained under the bona fide belief that WBHIDCO would directly pay the Service Tax to the Service Tax authorities. Consequently, the appellant neither obtained Service Tax registration nor charged Service Tax separately in the RA Bills raised on WBHIDCO.
The appellant subsequently pursued the matter with WBHIDCO, which paid the entire Service Tax amount of Rs.30,60,658/- after issuance of the Show Cause Notice. The appellant thereafter paid the Service Tax of Rs.30,60,658/- together with interest of Rs.13,35,458/- before the Order-in-Original was passed. The adjudicating authority appropriated the Service Tax and interest and dropped the penalty proposed under Section 78 of the Finance Act, 1994, while imposing a penalty of Rs.10,000/- under Section 77.
The Revenue challenged the dropping of the Section 78 penalty before the Commissioner (Appeals). The Commissioner (Appeals) allowed the Revenue’s appeal and held that the appellant was required to pay an equal amount of penalty under Section 78. Aggrieved by this order, the appellant approached the Tribunal.
