2012 (8) TMI 21 - AT - Service Tax

Penalties under. Sections 76, 77 and 78 of the Finance Act - Business Auxiliary Services - services provided by the appellant as regards the insurance of vehicle, loan from the Bank etc. and receiving the amount from the Bank and Insurance company to the services rendered Held that - activities rendered by the appellant could not have been taxed under the category of Business Auxiliary Services . Provisions of Section 80 of the Finance Act invoked. Penalties imposed on the appellant under Sections 76, 77 and 78 of the Act set aside.

Summary

Issues: Stay petition for waiver of pre-deposit of penalties; Service Tax liability on various services provided; Contest of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

In this judgment by the Appellate Tribunal CESTAT, Ahmedabad, the appellant filed a stay petition seeking waiver of pre-deposit of penalties imposed by the adjudicating authority, as they had already paid the Service Tax liability and interest. The Tribunal noted that the appeal itself could be disposed of at that stage. The appellant contended that the Service Tax liability issue was covered by previous Tribunal decisions. The appellant did not contest the Service Tax liability before the first authority but objected to the penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The Tribunal held that since the appellant did not challenge the Service Tax liability initially, it was improper to raise the issue at the appellate stage, thus upholding the Service Tax and interest thereon.

Regarding the penalties, the Tribunal referred to previous decisions indicating that the services provided by the appellant, such as insurance of vehicles and loans from banks, did not fall under "Business Auxiliary Services." Therefore, invoking Section 80 of the Finance Act, 1994, the Tribunal set aside the penalties imposed under Sections 76, 77, and 78. The appeal was allowed concerning the penalties while confirming the demand for Service Tax and interest. The Tribunal disposed of the appeal accordingly, maintaining the Service Tax liability but canceling the penalties, citing the nature of services provided by the appellant as the basis for its decision.