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2014 (1) TMI 410 - AT - Service TaxConsulting engineer service - Penalty u/s 76, 77 & 78 - Held that - appellant is a State Government organization and there is no intention to evade payment of duty. The appellant was under bona fide belief that as per the provisions of the Indian Electricity Act, 2003, the appellant is performing the statutory duties in respect of generation and supply of electricity - in view of the provisions of Section 80 of the Finance Act, the penalties imposed under the impugned order are set aside - Following decision of Discom Ltd. vs. CCE 2009 (8) TMI 337 - CESTAT, MUMBAI - Decided in favour of assessee.
Issues:
Taxability of consulting engineer service under Section 65 of the Finance Act. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act. Issue 1: Taxability of consulting engineer service under Section 65 of the Finance Act: The appellant appealed against an order confirming a demand of Rs.4,61,847 for providing consulting engineer service as per clause 31 of Section 65 of the Finance Act. The Tribunal referenced a previous decision in the case of Discom Ltd. vs. CCE, where it was held that the appellant's activity falls under 'consulting engineer service'. Consequently, the Tribunal found no error in confirming the demand with interest. Issue 2: Imposition of penalties under Sections 76, 77, and 78 of the Finance Act: Regarding penalties, the appellant, a State Government organization, argued that there was no intention to evade duty as they believed they were fulfilling statutory duties under the Indian Electricity Act, 2003. They relied on Section 80 of the Finance Act, which states that no penalty shall be imposed if there was a reasonable cause for the failure. The Revenue contended that penalties were justified as the appellant did not inform the Revenue about their activities or register with them. The Tribunal considered Section 80 and noted that being a Government Undertaking, the penalties were set aside based on the reasonable cause provision, thereby disposing of the appeal in favor of the appellant. ---
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