fiogf49gjkf0d
Demand — Amount collected by assessee in relation to handling, transportation and supervision charges while providing storage and warehousing charges — Service tax paid when pointed out by Department.
Held: No intention to evade tax — Extended period not invocable — Demand, interest and penalty be consequently reduced — Penalty u/s.78 of the Finance Act, 1994 set aside.
Facts:
The appellants were a public sector undertaking engaged in the business of warehousing fertilisers and other items and were registered with the service tax authorities for payment of service tax on ‘Storage and warehousing charges’. During the audit conducted by the service tax authorities, it was observed that the appellants were recovering supervising charges from their customers which was being paid to the handling and transportation contractors appointed by them. The appellant started paying service tax on handling and transportation charges as also supervision charges under the ‘Cargo handling services’. A show-cause notice was issued against the appellants demanding tax as ‘Cargo handling services’ rendered during the past and sevice tax demand of Rs. 79,43,447 was confirmed against the appellants along with interest and penalty. The appellants inter alia contended that there was no intention to evade service tax and failure to pay service tax was due to the non-understanding of the appellants regarding the term ‘Cargo handling agency’ services provided by them. Therefore, the demand for period beyond 12 months be dropped.
Held:
The Tribunal considering the status of the appellants as a public sector undertaking and their conduct after the matter was pointed out to them held that there was no intention to evade payment of tax. Demand, interest and penalty u/s.75 was to be paid in respect of normal period and the penalty u/s.78 was held as not maintainable.
