2015 (7) TMI 589 - AT - Service Tax

Penalty u/s 76 & 78 - Business Auxiliary Service - Authorized service station - Held that - Neither the primary adjudication order nor the impugned order intimated the appellant/ assessee regarding the facility available under Section 78, of remitting the confirmed demand of tax, interest and 25% of the penalty within the period of 30 days towards compliance with the liability assessed. In the light of judgments of several High Courts on this aspect of the matter, we therefore declare that the appellant is at liberty to remit the assessed component of service tax, the interest thereon and 25% of the penalty under Section 78 as stands confirmed by the lower appellate authority, within 30 days from today towards compliance with its liability confirmed by the impugned order. - no substantial error in the concurrent findings recorded by the primary and lower appellate authorities, that the appellant had provided the taxable service to RKBK True Value and had collected service tax and was in any event liable to service tax, in view of invoices produced by the appellant itself. The impugned order is impeccable and warrants no interference - Decided against assessee.

Issues:
1. Appeal against order dated 29.4.2010 passed by Commissioner (Appeals), Central Excise, Allahabad.
2. Service tax demand, interest, and penalties under Sections 75, 76, and 78 of the Finance Act, 1994.
3. Allegations of under-remittance of service tax during October 2003 to March 2005.
4. Appellant's defense regarding refurbishment services and service tax remittance.
5. Interpretation of invoices raised by the appellant on RKBK True Value.
6. Applicability of Section 78 for remitting the confirmed demand of tax, interest, and penalty.

Analysis:
1. The appellant appealed against the order dated 29.4.2010 by the Commissioner (Appeals), Central Excise, Allahabad. The impugned order partially relieved the appellant by dropping the penalty under Section 76 of the Finance Act, 1994. However, it confirmed the primary adjudication order passed by the Assistant Commissioner, Central Excise, Gorakhpur, which demanded service tax, interest under Section 75, and an equivalent penalty under Section 78, amounting to Rs. 1,58,384.

2. The proceedings were initiated against the appellant for under-remittance of service tax between October 2003 and March 2005. The appellant, registered to provide services as an authorized service station for vehicle repair and Business Auxiliary Service, was found to have charged labor and service charges on refurbishment services but failed to remit the service tax to the exchequer.

3. Investigations revealed that the appellant raised invoices on RKBK True Value for refurbishment services, indicating the service tax component but did not remit the tax. The appellant's defense that refurbishment on old cars purchased by them was a service to themselves and not to another entity was rejected by the authorities.

4. The authorities found that the invoices raised by the appellant on RKBK True Value clearly included components of UP Trade Tax and service tax, indicating the provision of taxable services to another entity. The appellant's argument that they remitted sales tax on selling refurbished vehicles to customers did not exempt them from service tax liability.

5. The judges noted that the appellant was not informed about the provision under Section 78 for remitting the confirmed demand within 30 days. Following the analysis, the judges upheld the findings of the authorities that the appellant provided taxable services to RKBK True Value, collected service tax, and was liable for service tax based on the invoices produced.

6. The judgment declared that the appellant could remit the assessed service tax, interest, and 25% of the penalty under Section 78 within 30 days from the judgment date for compliance. Ultimately, the appeal was dismissed without costs, as the impugned order was deemed correct and not warranting interference.

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