9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (9) TMI 301 - AT - Service TaxPenalty default in tax payment - appellants were not registered with the Service Tax Department not service tax not paid initially but subsequently paid - penalty under Section 76 the service tax by the person liable to pay in accordance with the provisions of Section 78 of the said Act assessee also suppressed the fact that they were rendering the taxable service by not registering themselves with the Department - non-imposition of penalty under Section 80 cannot, relate to the absence of knowledge of statutory provisions - no interference in order and appeal fails and is dismissed
Issues Involved:
1. Simultaneous imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994. 2. Applicability of Section 80 of the Finance Act, 1994, regarding reasonable cause for non-imposition of penalties. Detailed Analysis: Issue 1: Simultaneous Imposition of Penalties under Section 76 and Section 78 The appellants challenged the imposition of penalties under both Section 76 and Section 78 simultaneously. They argued that the law does not permit penalties under both sections for the same default. The Tribunal referred to multiple precedents, including Martial Security & Detective Service (P) Ltd. v. CCE, Meerut-I, Price Water House Coopers Dev. Associates Ltd. v. CST, Bangalore, and Remac Marketing (P) Ltd. v. Commissioner of Service Tax, Kolkata, which held that simultaneous imposition of penalties under Section 76 and 78 amounts to double penalty and is not permissible. However, the Departmental Representative cited the Kerala High Court's decision in Assistant Commissioner of Central Excise v. Krishna Poduval and the Tribunal's decision in Bajaj Travels Ltd. v. CCE, Chandigarh. These cases clarified that penalties under Section 76 and Section 78 are for distinct and separate offences: Section 76 pertains to failure to pay service tax, while Section 78 deals with suppression of the value of taxable service. The Kerala High Court emphasized that penalties under both sections can be imposed even if the offences arise from the same transaction. In the present case, the Tribunal upheld the penalties under both sections, noting that the appellants had suppressed the fact of rendering taxable services and failed to pay the service tax, thereby justifying penalties under both provisions. Issue 2: Applicability of Section 80 Regarding Reasonable Cause The appellants contended that their failure to pay service tax was not intentional and was due to ignorance of the statutory provisions, invoking Section 80 of the Finance Act, 1994, which allows for non-imposition of penalties if reasonable cause is proven. The Tribunal rejected this argument, stating that ignorance of law is not an acceptable excuse. The Tribunal noted that the appellants did not file a reply to the show cause notice and failed to establish any reasonable cause before the adjudicating authority. The letter dated 24th August 2006, which claimed ignorance of the law, was deemed an afterthought and insufficient to invoke Section 80. The Tribunal also referred to the Punjab & Haryana High Court's decision in Commissioner, Central Excise v. M/s. City Motors, which held that penalties under Section 78 were sufficient to cover the default and that two penalties for the same default could not be imposed. However, the Tribunal clarified that this case was not relevant to the present matter as it did not address the imposition of penalties for distinct defaults under Section 76 and Section 78. Conclusion The Tribunal concluded that the penalties under Section 76 and Section 78 were justified and dismissed the appeal. The appellants' claim of ignorance of the law was not accepted as a reasonable cause under Section 80, and the penalties were upheld based on the distinct nature of the offences under the respective sections.
|
