S.S. Garg ORDER
S.S. Garg, Member (J)
1. The present appeal has been filed by the Revenue against the impugned order dated 28.8.2009 passed by the Commissioner whereby the Commissioner has dropped the penalty under Section 76, 77 and 78, as the assessee has paid the service tax liability along with interest.
2. Briefly the facts of the present case are that the respondent is registered partnership firm engaged in the business of mining activities and transporting iron ore to their customers by road in a goods carriage and incurred freight charges. On gathering intelligence, the officers of the Central Excise (Preventive), Bellary Division, visited the business premises of M/s. Zeenath on 21.1.2006. On verification of records, they noticed that M/s. Zeenath were incurring the freight charges for transportation of iron ore to their customers through trucks and had availed the services of GTA for the same. In terms of Notification No. 36/2004-ST, dated 31.12.2004 read with Rule 2(1)(d)(v) of the Service Tax Rules, 1994, the consignor or consignee who is one of the specified person and pays freight, is required to take registration and pay service tax on transport of goods by road-in a goods carriage (GTA) services availed, in terms of Section 68(2) of the Finance Act, 1994. The officers had noticed that M/s. Zeenath neither applied for registration for the payment of service tax in terms of Section 69 of the Finance Act, 1994 nor paid the service tax on the value of freight charges incurred by them during the period from 01.01.2005 to 31.12.2005. Therefore, the officers observed that M/s. Zeenath appeared to have contravened the provisions of the Finance Act, 1994 and rules made thereunder. After investigation, a show-cause notice dated 15.2.2007 was issued by the Commissioner of Central Excise, Belgaum demanding service tax of Rs. 1,56,21,327/- under the category of GTA Service. After following due process of law, the Commissioner adjudicated the show-cause notice vide Order-in-Original dated 28.8.2009, whereby the Commissioner has held that respondent was liable to pay service tax under GTA Service on transportation charges incurred by them during the period January 2005 to December 2005 as per Notification No. 35/2004-ST dated 3.1.2004 read with Section 68(2) of the Finance Act, 1994 and the respondent was entitled to abatement to the extent of 75% on the gross freight incurred by him and that the actual service tax payable by the respondent after abatement of 75% was Rs. 39,83,436/-. The respondent paid the said service tax of Rs. 39,83,436/- and interest of Rs. 2,31,368/- and the same was appropriated by the Commissioner. Further, the Commissioner, relying upon the Boards Circular No. 341/18/2004 : MANU/DSTX/0049/2004 dated 17.12.2004, waived penalties invoking Section 80 of the Finance Act, 1994.
3. Heard both the parties and perused the records.
4. The learned AR submitted that the impugned order is not sustainable in law. He further submitted that once the extended period is invoked alleging suppression of facts with intend to evade payment of service tax then the Commissioner does not have the power to waive penalties since the instruction of the Board in Circular dated 17.12.2004 excluded cases involving fraud, collusion, suppression of facts or willful mis-statement or contravention of the provisions of service tax with intend to evade payment of service tax.