2011 (4) TMI 1148 - AT - Service Tax

Penalty imposed under Section 78 of the Finance Act Held that - no intention on the part for evading service tax as no evidence to this effect has been relied upon. The Commissioner (Appeals) has upheld penalties under Sections 75A, 77 and 76 of the Finance Act. It appears that the respondents have not filed any appeal. The grounds of appeal do not disclose any material to support allegation of evasion of service tax intention to evade payment of tax, no justification to interfere with the order of the Commissioner (Appeals) in setting aside the penalty under Section 78, appeal by the department is rejected

Summary

Issues:
Department's appeal against setting aside penalty under Section 78 of the Finance Act, 1994.

Analysis:
The case involved an appeal by the department against the order of the Commissioner (Appeals) modifying the penalty imposed under Section 78 of the Finance Act, 1994. The respondents, a deemed university, were engaged in activities like testing and consultancy, receiving considerable consideration during specific years. The original authority confirmed a demand for service tax, which was later reduced in de novo adjudication. Penalties were imposed under various sections, including Section 78. The Commissioner (Appeals) upheld most penalties but set aside the penalty under Section 78.

Upon careful consideration of submissions and records, the Tribunal noted that the original demand was significantly higher than the final confirmed amount. The confirmation was partly due to the respondents' inability to produce relevant documents. However, the Tribunal observed that there was no evidence indicating an intention to evade service tax, especially considering the nature of the respondents as an educational institute. The Commissioner (Appeals) upheld other penalties, and as the respondents did not appeal those decisions, the Tribunal found no material supporting an allegation of tax evasion or intention to evade payment. Consequently, the Tribunal saw no reason to interfere with the Commissioner (Appeals)'s decision to set aside the penalty under Section 78.

In conclusion, the Tribunal rejected the department's appeal, thereby affirming the decision to set aside the penalty under Section 78 of the Finance Act, 1994.