The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that benefit of Section 73(3) of the Finance Act, 1994 can’t be denied when the assessee discharged entire service tax along with interest.
M/s. Sumeru Builders challenged the confirmation of the demand for service tax and imposition of penalty. The appellants engaged in the building of a residential complex and in terms of clarification issued by CBEC 108/02/2009they were exempted from the payment of service tax in the capacity of “Builders”.
It was submitted that the Finance Act was amended in 2010 and with effect from 01.07.2010 the liability to pay service tax arose on builders. The appellant voluntarily discharged service tax amounting to Rs.13,71,476/- along with interest of Rs.47,925/-, a late fee of Rs.2,000/- on 18.04.2011 and 20.04.2011 through various challans.
A Coram comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that the appellants had discharged the liability to service tax soon after the same was pointed out by revenue.
It has been argued by the appellant that there was some doubt regarding their liability to service tax in terms of CBEC Circular No. 108/02/2009-ST-F.No. 137/12/2006-CX.4 dated 29.01.2009 therefore, there was some confusion in their mind. Further stated that they did not have any intention to evade payment of tax as they had taken registration immediately after the amendment clause (zzq) and (zzzh) of sub-section 105 of Section 65 of the Finance Act, 1994.
It was observed that Section 67(2) provided for treating the amount charged by the service provider as inclusive of service tax payable unless it is specifically mentioned in the documents. In the instant case, no evidence has been produced by the revenue to hold that the amount collected by the appellant is exclusive of service tax or has been separately collected by the appellant.
While allowing the appeal of the assessee, the Tribunal held that the appellant discharged the entire service tax along with interest soon after the same was pointed out and in this circumstance, the benefit of Section 73(3) should not have been denied.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
