2006 (12) TMI 52 - AT - Service Tax

Valuation(Service tax) Revenue contended that godown rent and clerk salary consider for calculation of service tax Authority after considering the detail rejected the revenue contention and allow the appeal with consequential relief

Summary

Issues:
1. Imposition of penalty under Sections 76 & 78 for paying Service Tax before the issue of Show Cause Notice.
2. Inclusion of godown rent and clerk salary in Service Tax calculation.
3. Applicability of Tribunal rulings on non-inclusion of rental charges and clerk salary.

Analysis:

1. The appeal challenged the imposition of penalties under Sections 76 & 78 for paying Service Tax before the issue of Show Cause Notice. The appellants argued that penalty should not be imposed in such circumstances, citing the Larger Bench judgment in ETA Engineering Ltd. v. CCE, Chennai and the judgment in Catalyst Capital Services Pvt. Ltd. v. CCE, Mumbai IV. The Tribunal concurred with the appellants, stating that penalties were not justifiable as Service Tax for C & F category had been paid before the issuance of the Show Cause Notice. The Tribunal criticized the Commissioner (Appeals) for disregarding Tribunal rulings, emphasizing that lower authorities must abide by Tribunal decisions and not deviate from them.

2. The issue of including godown rent and clerk salary in the calculation of Service Tax was also raised. The appellants argued that such charges should not be added as Service Tax should be limited to the C & F charges received. The Tribunal agreed with the appellants, citing its previous rulings on similar matters. It held that the Service Tax raised on godown rent and clerk salary was not justified based on established precedents.

3. The Tribunal addressed the applicability of its previous rulings on the non-inclusion of rental charges and clerk salary in Service Tax calculations. It noted that the Commissioner (Appeals) had disregarded these rulings, leading to a case of judicial indiscipline. The Tribunal emphasized that lower authorities are bound by Tribunal decisions and should not take a different stance. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary consequential relief.

This comprehensive analysis highlights the key legal issues raised in the judgment and the Tribunal's reasoning behind its decision, emphasizing the importance of adhering to established legal precedents and maintaining consistency in judicial decisions.