2015 (2) TMI 932 - AT - Service Tax

Penalty u/s 76 & 78 - Suppression of facts - Whether there was suppression in declaring the receipt of taxable service tax and consequent short payment of service tax and consequently imposition of penalty under section 76 and 78 of Finance Act was justified or not - Held that - While going through the records, it is evident that suppression of taxable receipt was detected by the revenue and the appellant accepted short levy of service tax and deposited the service tax, Their contention that there should not be imposition of penalty as service tax has been deposited by them is not tenable. It was only on investigation Toy the revenue that suppression could be detected. As such no benefit of exemption from penalty could be made available to the appellant. - Decided against assessee.

Summary

Issues:
1. Alleged non-payment of service tax and suppression of taxable value.
2. Imposition of penalty under sections 76 and 78 of the Finance Act, 1994.

Analysis:
1. The appellant appealed against an order passed by the Commissioner (Appeals), Jaipur, alleging non-payment of service tax and suppression of taxable value. The Revenue argued that the appellant did not properly pay service tax and initiated an inquiry. Upon examination of records and returns, it was found that the appellant had not deposited service tax on total receipts, suppressing the value of taxable service to evade tax. The appellant was accused of contravening various provisions of the Service Tax Rules, 1994. The appellant admitted to depositing a portion of the service tax but contested the imposition of penalties under sections 76 and 78 of the Finance Act, 1994, claiming no suppression was involved.

2. The Revenue contended that suppression was evident as per the order of the Commissioner (Appeals) and cited legal precedents to support the imposition of penalties. The Tribunal noted that suppression of taxable receipt was indeed detected by the Revenue, and the appellant accepted the short levy of service tax. The Tribunal found that the appellant's argument against penalty imposition was not valid since the suppression was only detected through Revenue investigation. Therefore, the Tribunal rejected the appeal, stating that no benefit of exemption from penalty could be granted to the appellant.

This judgment highlights the importance of proper disclosure of taxable values and the consequences of suppression in service tax matters. The Tribunal emphasized that penalties under the Finance Act, 1994 could be justified in cases where suppression of taxable receipts is detected, even if the tax is subsequently paid.