CESTAT, AHMEDABAD BENCH
Commissioner of Central Excise, Rajkot
Order No. A/301/WZB/AHD OF 2012
Appeal No. ST/45 OF 2010
March 12, 2012
1. This appeal is filed by the Revenue against Order-in-Appeal No. 535 (467-RAJ)/2009/COMMR'(A)/RAJ, dt.12.11.2009, to the extent that the said order-in-appeal has set aside the penalties imposed under section 77 for non-filing of return for the period October 2004 to March 2006 and has set aside the penalty imposed under section 76 for delayed payment of Service Tax for the quarter July 2006 to September 2006.
2. Heard both sides and perused the records.
3. Ld. SDR submits that the first appellate authority has erred in setting aside the penalties under sections 76 & 77 as indicated in appeal memorandum. He would reiterate the grounds of appeal.
4. Ld. Counsel appearing on behalf of the appellant would draw my attention to Paragraphs 6 & 7 of the first appellate authority’s order. He would also produce a copy of the Service Tax return for the period April 2006 to September 2006 filed with the authorities and submits that there was no tax liability as no taxable service was provided during the period.
5. On careful consideration of the submissions made by both sides, I find that the Revenue authorities have filed an appeal only for setting aside the penalty under sections 76 and 77 by the first appellate authority.
6. The relevant paragraphs 6 & 7 from first appellate authority’s order are reproduced below:-
“6. The first allegation is that the appellants have not filed returns for the period from (i) October, 2004 to March, 2005, (ii) April, 2005 to September 2005 and (iii) October, 2005 to March, 2006. In this regard, I find that during the course of personal hearing, they have produced photocopies of the Service Tax returns filed. From the photocopies shown, I find that same has been filed with Superintendent of Service Tax, Range: Gandhidham on 25.4.2005 to 25.4.2006. Therefore, the same has been filed in time and hence no penalty can be imposed under Section 77 of Finance Act, 1994 (32 of 1994). Hence, the lower authority’s impugned order to that extent is set aside.
7. With regards to allegation in the proceedings that Service Tax of Rs. 25,53,214 for the quarter 1.7.2006 to 30.9.2006 has been paid late by 44 days and also there is a short payment of interest of Rs. 909/-. On perusal of the copy of ST-3 filed with. Superintendent of Service Tax, Gandhidham, I find that there is a NIL return. Since there is no liability to pay Service Tax, the question of its late payment and short payment of interest of Rs. 909/- does not arise. Therefore, I do not find any merits in the impugned order of the lower authority to this extent and accordingly set aside.”
7. It can be seen from the above reproduced paragraphs that the first appellate authority has specifically indicated in Para 6 that the assessees had produced the photocopies of the ST-3 return filed with the lower authorities and hence he has set aside the penalties imposed under section 77. There is no dispute on this point, as in the grounds of appeal of the Revenue authorities have not challenged this factual finding. If that be so, the first appellate authority’s order of setting aside penalties under section 77 is correct.
8. As regards the penalty set aside by first appellate authority under section 76 of Finance Act, 1994, for the quarter ending 30.09.2006, I find from the Form ST-3 return produced by ld. Counsel for the assessee, that the said form specifically indicate the taxable service rendered from April 2006 to September 2006 is Nil. Such return has been filed with the lower authorities on 25.09.2006. I find the first appellate authority was right in coming to a conclusion if there are no services rendered during the relevant period, there cannot be any demand of Service Tax liability and there cannot be any delayed payment of Service Tax thereof. In view of this, the findings recorded by first appellate authority as reproduced hereinabove are correct and does not warrant any interference.
9. The appeal filed by the Revenue is liable to be rejected. The appeal is rejected.