9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (2) TMI 358 - AT - Service TaxPenalties u/s 76, 77 and 78 of Finance Act, 1994 - Non discharge of Service Tax liability on advance & commission received as mandap keepers - Held that - The appellant is a registered mandap keeper there could be a situation where the appellant could be under a bonafide belief as to not to discharge the Service Tax liability on the advance amount received, during the material period as the issue of Service Tax liability under the Mandap Keeper services also was in litigation finally settled by Hon ble Apex Court in the case of Tamilnadu Kalyana Mandapam Association (2004 (4) TMI 1 - SUPREME COURT OF INDIA). As the appellant had discharged the Service Tax liability on being pointed out & is not contesting the Service Tax liability and interest thereof the lower authorities should not have issued the show cause notice as provisions of Section 73 (3) may apply in this case. See Mangal Karyalaya Pvt.Ltd (2007 (4) TMI 40 - CESTAT, MUMBAI) - in favour of the appellant. This is fit case for invocation of provisions of Section 80 of Finance Act, 1994 for setting aside the penalties imposed on the appellant under Sections 76, 77 & 78 of Finance Act, 1994, as the appellant could be under a bonafide belief that they need not discharge the Service Tax on the amount of advance received by them - set aside the penalties imposed under Sections 76, 77 & 78 of Finance Act, 1994.
Issues involved:
Imposition of penalties under Section 76, 77, and 78 of the Finance Act, 1994 on the appellant. Analysis: 1. Issue of Penalties Imposition: The appeal was made against Order-in-Appeal No.242/2010 (STC)/MM/Commr.(A)/Ahd, dated 23.8.10, concerning penalties under Section 76, 77, and 78 of the Finance Act, 1994. The appellant, a registered mandap keeper, was confused about discharging Service Tax liability on advances received and commissions for decoration during the period of 01.08.2002 to 31.07.2003. Upon realizing the error, the appellant paid the Service Tax and interest, seeking the annulment of penalties. The lower authorities upheld the penalties, but the appellant contested based on bonafide belief, supported by relevant case laws. 2. Judicial Interpretation and Precedents: The Chartered Accountant representing the appellant cited judgments from the Tribunal in similar cases, such as Chintamani Mangal Karyalaya Pvt.Ltd, Jewel Hotel (P) Ltd, Creative Hotels Pvt.Ltd, and Idial Security Organisation. The presiding judge reviewed the records and acknowledged the confusion faced by the appellant, noting the settlement of the issue of Service Tax liability for mandap keepers by the Hon'ble Apex Court in the case of Tamilnadu Kalyana Mandapam Association. The judge found that the appellant had rectified the error upon notification and had not contested the Service Tax liability and interest, suggesting that Section 73(3) provisions might apply. 3. Application of Section 80 of Finance Act, 1994: Considering the circumstances, the judge deemed it appropriate to invoke Section 80 of the Finance Act, 1994, to set aside the penalties imposed under Sections 76, 77, and 78. The decision was based on the appellant's genuine belief that they were not required to pay Service Tax on advances received. The judge found reasonable cause to apply Section 80, ultimately allowing the appeal to the extent of setting aside the penalties. 4. Conclusion: The judgment concluded by invoking Section 80 and nullifying the penalties imposed on the appellant under Sections 76, 77, and 78 of the Finance Act, 1994. The appeal was allowed based on the appellant's bonafide belief and rectification of the Service Tax liability issue, as supported by relevant legal precedents. This detailed analysis of the judgment highlights the legal intricacies involved in the imposition and subsequent annulment of penalties under the Finance Act, 1994, emphasizing the importance of bonafide belief and adherence to relevant legal provisions and precedents.
|
