2011 (8) TMI 342 - AT - Service Tax

Penalty - the appellant is engaged in providing the services relating to promotion and marketing of the services provided by M/s. Bharti Cellular Ltd., a company providing mobile telephone services under the brand AIRTEL - the appellants admitted their duty liability and on being pointed out by the Revenue, paid the Service Tax even prior to the issuance of show cause notice except for an amount of Rs.10,086/- The appellants are not contesting the said confirmation but prayed for reduction in quantum of penalty.Separate penalties under the Sections 76 and 78 for the same offence is not justified - Accordingly, set aside the penalties imposed u/s 76, since we are upholding penalty u/s 78 with modification - As no option has been given to the appellant to deposit the 25% of penalty imposed u/s 78 within a period of 30 days from passing of the impugned order, we grant that option to the appellant to deposit 25% of the penalties within a period of 30 days from the receipt of this order in which period the same are reduced to 25%- Decided against the assessee.

Summary

Issues:
Confirmation of Service Tax liability, imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

Analysis:

1. Service Tax Liability Confirmation:
The appellate tribunal confirmed the demand of Service Tax amounting to Rs.55,286 against the appellant for providing services related to the promotion and marketing of mobile telephone services. The appellant, acting as an agent for a company providing mobile services, contended that a portion of the amount was related to bonuses earned by them. Despite the appellant admitting the duty liability and paying most of the Service Tax before any formal notice, a dispute arose regarding the remaining amount. The tribunal upheld the Service Tax confirmation but considered the appellant's request for a penalty reduction.

2. Imposition of Penalties:
The appellant raised concerns about the penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant acknowledged the Service Tax liability but argued against the penalties levied. The tribunal observed that imposing separate penalties under Sections 76 and 78 for the same offense was unjustified. Consequently, the tribunal set aside the penalties under Section 76 but upheld the penalty under Section 78 with modifications. Additionally, the appellant was granted the option to pay 25% of the penalty within 30 days from the receipt of the order. However, the penalty under Section 77 for non-filing of returns was upheld due to the nature and quantum of the penalty.

3. Conclusion:
In conclusion, the tribunal disposed of the appeal by confirming the Service Tax liability but modifying and reducing the penalty under Section 78. The penalties under Sections 76 and 77 were set aside and upheld, respectively. The appellant was granted the option to pay a reduced amount of penalty within a specified timeframe.