C.J. Mathew ORDER
M.V. Ravindran, Member (J)
1. This appeal is directed against Order-in-Original No. 36ST/2012/C, dated 30-7-2012 passed by the Commissioner of Central Excise & Customs, Nagpur. Heard both the sides and perused the records.
2. The issue involved in this case is regarding service tax liability during the period April, 2007 to October, 2007 under the category of 'business auxiliary service' for supervising the loading work of coal into wagon as per contract with various Electricity Boards. The adjudicating authority, after considering the submissions made by the appellant, has confirmed the tax liability, appropriated the amounts paid by the appellant for the tax liability and interest, imposed equivalent amount of penalties under Sections 76 and 78 and also imposed penalties under Section 77 of the Finance Act, 1994.
3. Learned Counsel for the appellant would submit that during the relevant period in question, the issue of taxability of the services rendered by the appellant under the 'business auxiliary services' was contested at various levels and it was finally held that such services are taxable, by the Hon'ble Apex Court in the case of Coal Handlers Pvt. Ltd. v. Commissioner of Central Excise-MANU/SC/0552/2015 : 2015 (38) S.T.R. 897 (S.C.). It is his submission that due to such litigation being carried out at various levels, they did not discharge service tax liability but on being pointed out by the Audit Department, paid the amount in December, 2007 and January, 2008 along with interest. He would submit that the show cause notice was issued on 10-10-2011 which should not have been issued as the issue is covered by the provisions of sub-section (3) of Section 73 of the Finance Act, 1994 and this ground was taken up before the adjudicating authority who did not accept this contention. It is his submission that they had explained the delay as owing to non-receiving of payments of service tax from State Electricity Boards. He would pray that the penalties imposed be set aside.
4. Learned Authorised Representative would reiterate the findings of the adjudicating authority for imposition of penalties.
5. We have considered the submissions and perused the records. We note that there is no dispute that the appellant had discharged tax liability for the period in question in December, 2007 and January, 2008 along with interest and informed the Department by letter dated 28-1-2008. In the said letter, we notice that the appellant had explained that the delay in discharging the service tax liability was due to non-receipt of the payments from their clients who are State Electricity Boards. It is also noticed that the appellant could have carried a bona fide belief that these services would not be covered under 'business auxiliary service'.
6. We also note, the fact that the appellant himself had discharged the service tax liability on being pointed by the Audit Department immediately. In our considered view, lower authorities should not have issued the show cause notice to the appellant for the demand of the service tax and appropriation thereof and for imposition of penalties as provisions of Section 73(3) of the Finance Act, 1994 applies in facts of this type as is in this case. Be that as it may, we also find strong force in the submissions made by the learned Counsel that the provisions of Section 80 of Finance Act, 1994, can be invoked in such a situation wherein there is no delay in discharging service tax liability on being pointed out and justifiable reason as to non-receipt of payments from the State Electricity........