The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted benefit of Small Scale Industry (SSI) exemption as the turnover was less than 4 lakhs in the relevant Financial Year (FY).
The present appeal was directed against the impugned order passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant and has confirmed the demand of service tax of Rs. 1,53,979/- along with interest under Section 75 of the Finance Act, 1994. The Commissioner (Appeals) has also imposed equal penalty under Section 76 and 78 of the Finance Act, 1994 and also penalty of Rs. 1,000/- under Section 77 of the Finance Act, 1994.
The Consultant who appeared for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and law. He further submits that the order-in-original as well as order-in-appeal both have been passed in mechanical manner without appreciation of complete facts and there are apparent factual mistakes in both the orders.
The Consultant further submitted that the appellant is eligible for SSI Exemption for the period from September 2005 to march 2007 because there charges are less than 4.00 Lacs in a Financial Year and as per the SSI Exemption provided under Notification No. 06/2005 S.T. dated 01.03.2005, the appellant are not liable to pay any tax for the said period and this fact is fortified from the reply received in pursuance of the RTI Application and confirmed by IOCL.
On the other hand, the Departmental Representative reiterated the findings in the impugned order and submitted that the services rendered by the appellant fall under the category of Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994.
It was further submitted that the extended period has rightly been invoked because the appellant did not pay the tax, did not get the registration and did not file the service tax returns and that the appellant is not entitled to SSI exemption as they fall under the proviso to the exemption because they are providing branded services.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “we find that the appellant is entitled to SSI exemption for the period 2005-2006 because their turnover was less than 4.00 lacs in that financial year which entitles them for SSI exemption in terms of Notification No. 06/2005-ST dated 01.03.2005.”
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