2013 (1) TMI 24 - AT - Service Tax

Penalty u/s 77- Penalty u/s 78 - Security services provider - Short payment of service tax - On being pointed out, they have discharged the service tax liability along with interest - Held that - They have also collected the higher amount of service tax from the service recipients but paid to the Government lesser amounts. This position stands accepted by the proprietor of the appellant firm. Ingredients of section 78 justifying imposition of equal amount of penalty are evidently available on records. There is no justification for waiving penalty u/s 78 and 77. In favour of revenue

Summary

Issues: Appeal against order sustaining penalty under sections 77 & 78 of the Finance Act.

Analysis:
1. The appellant, a security services provider, was found to have not paid proper service tax. Upon detection, they paid the service tax liability along with interest. The original authority confirmed the liability and imposed penalties under sections 76, 77, and 78 of the Finance Act.

2. The Commissioner (Appeals) set aside the penalty under section 76 but upheld the original authority's decision on other aspects. The appellant then appealed to the Tribunal seeking to overturn the penalties under sections 77 and 78.

3. The appellant was found to have collected a higher amount of service tax from recipients but paid lesser amounts to the Government. This discrepancy was acknowledged by the appellant's proprietor. The learned Deputy Commissioner argued that the ingredients of section 78, justifying the imposition of an equal penalty, were clearly present in the records.

4. The Tribunal agreed with the Deputy Commissioner's assessment, stating that the appellant's actions warranted the penalty under sections 77 and 78. Consequently, the appeal to waive these penalties was rejected, and the original penalties were upheld.

5. The Tribunal concluded that based on the evidence and circumstances, there was no justification for setting aside the penalties under sections 77 and 78. Therefore, the appeal against the sustained penalties was dismissed, affirming the decision of the Commissioner (Appeals) and the original authority.