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Issues involved: Appeal against order confirming demand and imposing penalties u/s. 76 & 78 of the Finance Act, 1994. Applicability of Section 80 of the Finance Act, 1994 in waiving penalties.
Issue 1: Confirmation of demand and imposition of penalties The appellant filed an appeal against the order confirming a demand of &8377; 3,52,306/- and imposing penalties u/s. 76 & 78 of the Finance Act, 1994. The total amount demanded under the show cause notice was &8377; 13,74,148/-, out of which only the demand of &8377; 3,52,306/- was confirmed by the original adjudicating authority. The amount was later enhanced to &8377; 9,60,560/- by the Commissioner Appeals. The appellant argued that the first appellate authority should have waived the penalties under Sections 76 & 78 of the Finance Act, 1994, u/s Section 80 of the same Act. Issue 2: Consideration of arguments and imposition of penalties During the hearing, the appellant requested more time to file written submissions through their Chartered Accountant. However, the request was rejected as sufficient time had already lapsed. The Revenue argued that penalties u/s. 76 and 78 were correctly imposed based on case laws discussed by the Commissioner (Appeals). Issue 3: Non-imposition of penalties under Section 80 The appellant contended that the first Appellate Authority did not consider their arguments regarding the non-imposition of penalties under Section 80 of the Finance Act, 1994. The first appellate authority did not provide reasoning for rejecting the appellant's request u/s. 80. However, it was observed that the appellant had discharged their Service Tax liability to the best of their ability and had paid the remaining amount pointed out by the audit. The confirmation of duty was not straightforward, and there was a reasonable cause for the appellant to not impose penalties u/s. 76 & 78 as per the provisions of Section 80 of the Finance Act, 1994. Consequently, the appeal filed by the appellant was allowed. (Separate Judgement not mentioned)
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