Order Date – 15 September 2023

Parties: M/s. Kaveri Warehousing Pvt. Ltd. Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. Kaveri Warehousing Pvt. Ltd., are engaged in Storage and Warehousing Services and Goods Transport Operator Services. The appellant had a centralized registration at Chennai for their various branches situated all over India.
• On being pointed out they had discharged the entire service tax along with proportionate interest. Later a show cause Notice dated 1.3.2012 was issued by the ADG, DGCEI, Chennai demanding service tax on Storage and Warehousing Service and GTA service for the period from February 2009 to December 2009 besides demanding interest and imposition of penalty.
• The appellant being aggrieved on imposition of penalty and disallowance of cenvat credit filed the appeal.

Issue –

• Whether penalty can be imposed if the tax along with interest were paid before issuance of SCN?

Order –

• The Tribunal observed that in this case the appellant was not found eligible to have availed the credit of Rs. 4,05,781/- as the service had not been received by the appellant. The non receipt of service has not been disputed before the Tribunal. Further, it is also seen that the impugned order has pointed out discrepancies in the amounts claimed to have been debited towards duty from the credit account and that which was actually debited. Hence no discrepancies noticed and pointed out cannot be faulted.
• From a plain reading of section 73 it is seen that nothing contained in sub-section (3) shall apply to a case where section 73 (4) applies. This is a case where the Original Authority has invoked the extended time limit under proviso to section 73(1) of the Finance Act 1994 for demand of service tax citing suppression of facts with an intention to evade payment of duty. Hence they cannot seek protection under section 73 (3).
• As per the general rule of legal proceedings, he who asserts must prove. It was for the appellant to prove financial constraint before the original authority and thereby plead ‘reasonable cause’ for delayed payment. A bald statement of financial constraint will not be enough. Even as per section 106 of the Indian Evidence Act, the fact within the knowledge of a person must be proved as the burden of proof is cast upon him.  Further when the officers visited their unit and discovered the evasion of duty, they have immediately cleared all the tax dues. They did not face any financial constraint in doing so. 
• The impugned order merits to be upheld and is so ordered. The appeal fails and is disposed of accordingly.