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2016 (7) TMI 1036 - AT - Service TaxLevy of penalty - Valuation - service tax liability on TDS amount and reimbursements received towards LPG gas and Milk from the recipient of services - Outdoor Catering Service - reimbursement of expenditure - Held that - the disputed tax and interest have already been paid (excess tax paid as claimed by the Appellant), the issue to be addressed in this appeal is the imposition of penalty under Section 76, Section 78 of the Finance Act, 1994 and adjustment of excess tax paid by the Appellant. - Held that - Appellant s case deserves a waiver of penalty under Section 78 of the Finance Act, 1994 in view of Section 80 of the Finance Act, 1994 as it existed during the period of dispute. As regards the consequential relief on excess payment of tax, we find that no substantiation in the form of documentary evidence has been produced and the claim is being made based on assertions . Accordingly, we are unable to accede to the prayer. Accordingly, appeal is allowed in so far as they relate to imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994. - Decided partly in favor of assessee.
Issues involved:
Waiver of penalty under Section 76 invoking Section 73 (3) of the Finance Act and waiver of penalty under Section 78 invoking Section 80 of the Act during the period October 2006 to September 2008. Detailed Analysis: 1. Waiver of Penalty under Section 76: The appellant, a catering service provider, faced a demand for non-payment of service tax for a specific period. The appellant argued that the non-payment was due to ignorance of tax rules rather than mala fide intent. They contended that the service tax liability was based on invoiced amounts, leading to discrepancies. The appellant also highlighted that they acted as a pure agent for certain expenses, which were not taxable under the rules. The appellant paid the tax and interest before the issuance of the Show Cause Notice (SCN), demonstrating good faith. The tribunal found that the provisions of Section 73(3) applied, allowing the appellant to pay the tax and interest before the SCN without facing penalties under Section 76. The tribunal referred to a clarificatory explanation in the law to support this decision. 2. Waiver of Penalty under Section 78: Penalties under Section 78 were imposed for non-payment of service tax on TDS amounts and reimbursements. The appellant believed that the tax had already been accounted for in the invoiced amounts and had paid the tax again at the department's insistence. Regarding reimbursements for LPG and milk, the tribunal considered legal interpretations and precedents, concluding that these reimbursements were not subject to service tax. The tribunal also noted a subsequent amendment to the law regarding the inclusion of reimbursements in the taxable value. Consequently, the tribunal granted a waiver of penalty under Section 78, citing Section 80 of the Finance Act applicable during the disputed period. 3. Adjustment of Excess Tax Paid: The appellant claimed an excess payment of tax, seeking adjustment against future payments. However, the tribunal found the claim lacked sufficient documentary evidence and was based on mere assertions, leading to a denial of the request for adjustment. 4. Conclusion: The tribunal allowed the appeal concerning the imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994. The decision was based on the appellant's good faith actions, legal interpretations, and the retrospective application of statutory amendments. The order was pronounced on 13.07.2016. This comprehensive analysis covers the issues of penalty waiver under Sections 76 and 78, along with the adjustment of excess tax paid, as addressed in the appellate tribunal's judgment.
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