2016 (8) TMI 448 - AT - Service Tax

Levy of penalty - valuation - extended period of limitation - taxable services - claim of cum tax benefit - deduction of Bonus and PF contribution - Held that - the issue of valuation in Service Tax matters was issue of interpretation of statute under litigation. - Therefore levy of penalty set aside. Subsequent demand - Held that - the show cause notice dated 08.10.12 was issued on the same set of facts for the period from 2007-08 to 2011-12. The facts of the case were known to the department and on the basis of facts show cause notice dated 06.10.10 was issued. Therefore, contention in the show cause notice dated 08.10.12 that there was suppression of material facts is not tenable in Law. Decided partly in favor of assessee.

Summary

Issues:
1. Early hearing and clubbing of appeals.
2. Stay application by Revenue.
3. Appeal No. ST/59670/13 regarding Service Tax demand.
4. Appeal No. ST/50752/15 regarding Service Tax demand and penalties.
5. Appeal No. ST/51100/15 filed by Commissioner of Central Excise, Allahabad.

Analysis:
1. The first issue involved the early hearing and clubbing of appeals. The Tribunal allowed the early hearing of the appeal and clubbing of related appeals as they involved the same issue for the same appellant, providing consent from both parties. This decision expedited the process for the parties involved.

2. The second issue pertained to the stay application filed by the Revenue. The Tribunal dismissed the stay application as the concerned appeal was already taken up for hearing, rendering the application infructuous. This decision was based on the procedural status of the case.

3. In Appeal No. ST/59670/13, the Tribunal addressed the Service Tax demand raised on bonus and PF contributions paid by the service receiver to the service provider. The Tribunal held that the service provider was entitled to the benefit of cum duty value, setting aside the penalty imposed under Section 78 of the Finance Act, 1994, based on the interpretation of the statute and relevant legal precedents.

4. Appeal No. ST/50752/15 focused on a Service Tax demand and penalties imposed on the appellant. The Tribunal found that the show cause notice issued for the same set of facts and period was not sustainable, following the legal principle that there was no suppression of material facts. The Tribunal set aside the proceedings initiated through the show cause notice, granting relief to the appellant.

5. Appeal No. ST/51100/15 involved a challenge by the Commissioner of Central Excise, Allahabad against the impugned order reducing the tax liability. The Tribunal analyzed the contentions of both parties and concluded that the show cause notice issued for an extended period alleging suppression of facts was not valid. Following legal precedents, the Tribunal dismissed the appeal filed by the Revenue and provided directions for the other appeals, ensuring a fair and just decision.