Mercedes Benz Research and Development India Private Limited Vs Commissioner of Service Tax (CESTAT Bangalore)
Summary: CESTAT Bangalore allowed the appeal of Mercedes Benz Research and Development India Pvt. Ltd. on the limited issue of penalty. The appellant, a 100% Export Oriented Unit registered for providing Business Support Services, Consulting Engineers Services and Information Technology Software Services (ITSS), was found during investigation to have not paid service tax on ITSS from 16.05.2008 onwards.
Service tax of Rs.60,33,552/- for the period from 16.05.2008 to 31.03.2010, which had been paid by the appellant, was confirmed and appropriated along with interest. The adjudicating authority also imposed a penalty of Rs.1,000/- under Section 77 and an equivalent penalty under Section 78 of the Finance Act, 1994, while giving the appellant an option to pay 25% of the penalty within 30 days of receipt of the order.
The Tribunal noted that the show-cause notice was issued on 30.06.2010, whereas the payments confirmed in the impugned order had already been made by the appellant on 05.05.2010 along with interest, much before issuance of the notice. At the hearing, the appellant submitted that it had additionally remitted Rs.15,09,388/-, representing 25% of the duty amount as penalty, on 27.07.2011. This payment was within 30 days from the date of the impugned order dated 29.06.2011. Consequently, CESTAT set aside the balance penalty representing 75% of the duty amount. The Tribunal held that, in view of the payments already made, nothing survived in the appeal and accordingly allowed it.
FULL TEXT OF THE CESTAT BANGALORE ORDER
This appeal is filed by the appellant M/s. Mercedes Benz Research and Development India Pvt. Ltd., an 100% Export Oriented Unit (EOU) and registered under service tax for providing taxable services under the category of Business Support Services, Consulting Engineers Services and Information ST/2742/2011 Technology Software Services (ITSS). On investigation, it was found that the appellant was not paying service tax on ITSS services from 16.05.2008 onwards. Accordingly, service tax amount of Rs.60,33,552/- for the period 16.05.2008 to 31.03.2010 paid by the appellant has been confirmed and appropriated along with interest and penalty of Rs.1,000/-under Section 77 and equivalent amount of penalty under Section 78 of the Finance Act, 1994 have been imposed, with an option to the appellant to pay 25% of the penalty within 30 days of the receipt of the impugned order.
2. Heard both sides. The issue to be decided is limited only with regard to imposition of penalty. The show-cause notice was issued on 30.06.2010 and the payments confirmed by the adjudicating authority in the impugned order were paid by the appellant much before issuance of show-cause notice on 05.05.2010 along with interest. Today when the appeal came up for hearing, the Chartered Accountant for the appellants submitted that in addition to the above payments, the appellant had remitted Rs.15,09,388/- being 25% of the duty amount as penalty on 27.07.2011, which was within 30 days from the date of issue of the impugned order dated 29.06.2011. Consequently, the balance amount of penalty i.e., 75% of the duty amount is set aside. In view of the above, nothing survives.
Appeal is allowed.
(Operative portion of the order was pronounced in Open Court on conclusion of hearing.)
