Case Law Details

Case Name : Pressure Vessels & Equipments Testing Enterprises Vs Commissioner of Central Excise, Salem (CESTAT Chennai)
Appeal Number : Final Order No. 895 OF 2012
Date of Judgement/Order : 28/08/2012
Related Assessment Year :
Courts : All CESTAT (607) CESTAT Chennai (79)

CESTAT, CHENNAI BENCH

Pressure Vessels & Equipments Testing Enterprises

Versus

Commissioner of Central Excise, Salem

FINAL ORDER NO. 895 OF 2012

STAY ORDER NO. 768 OF 2012

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APPLICATION NO. ST/S/148 OF 2012

APPEAL NO. ST/211 OF 2012

AUGUST 28, 2012

ORDER

1. The appellants are in appeal against the impugned order imposing penalties under sections 76 and 78 of the Finance Act, 1994.

2. The appellants have undertaken the activity of technical testing of the LPG tankers as per rule 18 and rule 44 of the Explosives Act. The Revenue is of the view that as the appellants are involved in the activity of technical testing, therefore, they are liable to pay service tax under the category of ‘Technical Testing and Certification Services’. Therefore, proceedings were initiated against the appellants. The appellants paid the service tax along with interest before issuance of the show-cause notice. Thereafter a show-cause notice was issued for imposition of penalties. After issuing show-cause notice penalties under sections 76 and 78 were imposed on the appellant. Aggrieved by the said order, the appellants are before me.

3. After hearing both sides I find that as the issue lies in a narrow compass, therefore, I waive the requirement of pre-deposit of penalties and proceed to take up the appeal itself for final disposal.

4. The learned counsel contended that the testing of LPG tankers is a statutory obligation under the Indian Explosives Act, 1884, therefore, service tax is not payable on the activity undertaken by them. As no service tax is payable, penalties under sections 76 and 78 are not warranted.

5. Considering the submissions made by the learned counsel, I find that the Tribunal in the case of Harshita Handling v. CCE [2010] 28 STT 105 (New Delhi – CESTAT) has held that technical inspection and testing under the Indian Explosives Act, 1884 is a statutory obligation, therefore the same is not liable to tax under Technical Testing and Certification Service. Therefore, the appellants are liable to pay service tax as prayed by the learned counsel. When no service tax is payable, penalties under sections 76 and 78 of the Finance Act, 1994 are not warranted. Therefore, the impugned order is set aside and the appeal is allowed. The stay application also stands disposed of accordingly.

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