Whether penalty u/s 77 imposable for failure to get registration certificate amended?

PJ/CASE LAW/2016-17/3102

Case:-SRF LTD. VERSUSCOMMISSIONER OF CENTRAL EXCISE, TRICHY

Citation:- 2016 (41) S.T.R. 123 (Tri. - Chennai)

Brief Facts:-The present case relates to imposition of penalty under section 77 of the Finance Act, 1994 for default in taking registration under the category of ‘Business Auxiliary Services’.
Appellants Contention:-Appellant explains that it was registered on 1-3-2005 before the service tax authorities. This is patent from Pages 36 & 37 of the appeal folder. The service for which it was registered was goods transport agency. Although it was registered for that service, when it received business auxiliary service from abroad it has also discharged service tax liability under the deeming provision of law. There was no default at all in discharge of tax liability. But because it could not amend its registration certificate from 1-3-2005 to 25-11-2011, it was penalized under Section 77 of the Finance Act, 1994. It is the prayer of the appellant to waive out the penalty in absence of default to registration of Business Auxiliary Service in its registration certificate.

Respondents Contention:-Revenue supports the order of the authorities below.

Reasoning Of Judgement:-Heard both sides and perused the records. No doubt registration is a paraphernalia to bring the assessee into the fold of law. The assessee was already brought into the fold of law from 1-3-2005. So it cannot be said that it is an unregistered assessee. Only there was an absence of endorsement of the new activity in the registration certificate. That does not amount to default when the assessee consciously discharged tax liability. It does not appear from the conduct of the assessee that it is required to be dealt with coercively under law for the non-endorsement of the different activity which was carried out subsequently. Considering the registration status of the assessee and no deliberate default to cause evasion to Revenue, the penalty imposed under Section 77 is waived and appeal is allowed.

Decision:-Appeal allowed.

Comment:-The gist of the case is that failure to amend Service Tax Registration by including new service is only a procedural lapse when applicable service tax liability has been discharged. Since in the given case, the assessee was already registered with the department for Goods transport agency service and on receipt of Business Auxiliary Service from abroad, assessee duly discharged full Service tax liability under deeming provisions of law, there was no contravention on their part to attract penalty under section 77 of the Finance Act. Therefore, merely because of Non-endorsement of new service in registration certificate, the imposition of penalty u/s 77 is not justified.

Prepared By:- Neelam Jain

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PJ/CASE LAW/2016-17/3102

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