2015 (9) TMI 1401 - AT - Service Tax

Imposition of penalty under section 77, 78 and also section 70 - Held that - Penalties imposed under section 70 read with rule 7C of the service tax rules cannot be waived any conditions. Accordingly, the penalties imposed under section 70 is upheld and appeal to that extent is rejected. As regards, penalties imposed under section 77, find that said penalty imposed for non-obtaining of the S.T. registration. This set penalty is also upheld. As regards penalties imposed under section 78, find that the appellant has discharged 25% of penalty as per section 78. In the facts and circumstances of this case find nothing in records to invoke provisions of section 80 of the Finance Act 1994 for setting aside the penalty. In any case 25% of penalty is discharged by the appellant as per the provisions of section 78 of the Finance Act 1994, accordingly balance penalty imposed under section 78 need not be recovered.

Summary

Issues:
Maintainability of the appeal due to the amount involved being less than two lakhs; Penalty imposed under sections 70, 77, and 78 of the Finance Act 1994.

Analysis:
The judgment by Appellate Tribunal CESTAT MUMBAI, delivered by Mr. M.V. Ravindran, Member (Judicial), addressed the issue of maintainability of the appeal based on the amount involved being less than two lakhs. After hearing both sides and examining the records, it was determined that the appeal concerning penalties was admissible due to the narrow scope of the matter. The primary issue revolved around the penalties imposed on the appellant under sections 70, 77, and 78 of the Finance Act 1994.

Upon reviewing the case details, it was noted that the appellant had acknowledged the service tax liability and settled it, including the interest, before the show cause notice was issued. The appellant had also paid 25% of the penalty under section 78 as required by the provision. However, the appellant contested the imposition of penalties under sections 70, 77, and 78.

Regarding penalties under section 70 in conjunction with rule 7C of the service tax rules, the tribunal held that such penalties could not be waived under any circumstances. Therefore, the penalties under section 70 were upheld, and the appeal in that regard was rejected. Moving on to penalties under section 77, it was found that these penalties were imposed for the failure to obtain S.T. registration, and as such, they were upheld.

In the case of penalties under section 78, it was observed that the appellant had already paid 25% of the penalty as required by the section. Considering the circumstances of the case, the tribunal found no grounds to apply the provisions of section 80 of the Finance Act 1994 to set aside the penalty. Consequently, since 25% of the penalty had been discharged by the appellant as per section 78, the remaining penalty under section 78 was deemed unnecessary to recover.

In conclusion, the appeal was disposed of by the tribunal, and the decision was pronounced in court by Mr. M.V. Ravindran, Member (Judicial).