2007 (11) TMI 80 - AT - Service Tax

Comm(A) instead of considering the issue, whether reasonable cause for failure was made out, resorted to the stringency of Sec.11AC C. Ex. Act Penalty imposed Rs 1000 u/s 78 not viewed while finalizing penalty of equal amount u/s 76 Sec. 80 applicable so matter remanded to Comm(A)

Summary

Issues:
Challenge to penalties imposed under Section 75-A, 76, and 78 of the Finance Act, 1994 by the Commissioner (Appeals).

Analysis:
The appellant, a dealer of Hyundai cars providing services related to promoting car loan schemes, received commission for cars sold in the assigned territory. The Revenue considered these services as "Business Auxiliary Service." The adjudicating authority found the appellant liable to pay Service Tax of Rs.1,27,543 on the taxable service value that escaped assessment from 01.07.2003 to 22.02.2006. Penalties were imposed under Section 75A, Section 76, and Section 78 of the Act. The penalties totaled Rs.1,29,043. The Appellate Tribunal noted the appellant's challenge to the penalties imposed by the adjudicating authority.

The Appellate Commissioner, in the impugned order, referred to a judgment of the Hon'ble High Court of Punjab & Haryana regarding the scope of Section 11-AC of the Central Excise Act, 1944. The Commissioner (Appeals) imposed penalties without considering the provisions of Section 80 of the Finance Act, 1994, which provide for the absence of penalties if the assessee proves a reasonable cause for failure. The Appellate Tribunal observed an error in the Commissioner's approach, as Section 80 of the Finance Act, 1994, does not have a parallel provision in the Central Excise Act, 1944. The Appellate Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for fresh consideration in light of the judgment and the provisions of the Finance Act, 1994.

In conclusion, the Appellate Tribunal allowed the appeal by way of remand, emphasizing the need for the Commissioner (Appeals) to reconsider and decide on the penalties imposed under Section 75-A, 76, and 78 of the Finance Act, 1994, in accordance with the law and the judgment provided. The matter was remanded for a fresh determination based on the legal provisions and the specific circumstances of the case.