M/S Mahisagar Welding works VS. CCI Ahmedabad


West zonal bench at ahmedabad court-III


Appeal No. :

ST/328/2012 -SM



For assessee: Shri vipul Khandar , Chartered Accountants

For revenue: Shri GP thomus, A.R.



There was short payment of service tax by forging in duty paying challan. Appellant had appealed that accountant was responsible for this act act and assessee should not be held liable. Final order was passed that assessee can’t held liable to any other person, acting as his agent, responsible for his willful wrong act or fraud.


  1. The assessee has filed appeal against order passed by Additional commissioner , Ahmedabad III.
  2. Shri Vipul Khandar , appearing on behalf of appellant argued that delay in payment of service tax is due to Accountant of assessee who had not deposited service tax in time and had forged in figures of service tax payment challan. The shortfall was made good by depositing service tax with interest. Interest was paid after issue of show cause notice. Mr Khandar also argued that penalty should not be levied in this case. He Relied upon following case for non levy of penalty: CBEC Circular No. 137/167/2006 -CX 4. date 3/10/2007 and Bajaj Travels LTD vs. CST.
  3. It was also argued that if the above arguement was not accepted then both penalty cannot be invoked  u/s 76 and 78 as per section 78 of financial act, 1994.
  4. Shri GP Thomas argued that Appealant ‘s son was looking after all the work of service tax payment and there was clear forging in service tax challan by altering digit of service tax amount. He argued that any forging of amount by any person of proprietor will be fraud committed by appealant as per ‘vicarious responsibility’. He argued that penalties should be upheld against the appealant and relied upon following case laws: B.N. Thacker & company , S.S. Nandavana vs. CCE rohtak.


Tribunal held that it was clear forging case of adding 0 figure after paying tax in challan. Assessee could not held responsible his accountant as it is his vicarious responsibility. Revenue correctly relied upon the cases presented.In S.S. Nandavana vs. CCE , there was forging of TR -6 challan. Appealant ‘s argument was right as both penalties u/s 76 and 78 could not be levied. Still penalty u/s 76 would be levied in this forging case.




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