2007 (11) TMI 84 - AT - Service Tax

Authorized Service Station - Exact amount of service tax value received by the appellant not disclosed - value was consciously suppressed - full amount of services provided against free coupons not disclosed - no justification put forth by the appellant for same penalty u/s 75A, 76 & 77 upheld.

Summary

Issues:
1. Appellant's liability to pay service tax for the period 2001-04.
2. Disclosure of incorrect service tax value by the appellant.
3. Imposition of penalties under various sections of the Finance Act.

Analysis:

1. The appellant, engaged in the service tax category of "Authorized Service Station," failed to register and pay service tax for the period 2001-04. Upon investigation, it was found that the appellant provided services against free service coupons from M/s Bajaj Auto Ltd. The appellant disclosed an amount of Rs.4,65,290 involving service tax of Rs.28,322, which was paid later. However, it was revealed that the actual amount received from M/s Bajaj Auto Ltd. was higher, leading to further payment of tax and interest. The appellant was subsequently registered with the Central Excise Department.

2. The revenue initiated proceedings against the appellant, proposing confirmation of tax, interest, and penalties under various sections of the Finance Act. The Assistant Commissioner confirmed the tax and interest amounts, imposing personal penalties under Sections 75A, 76, 77, and 78 of the Act. The penalties included amounts for not getting registered in time, failure to file ST returns, and willful evasion of service tax. The Commissioner (Appeals) upheld the penalties, leading to the present appeal focusing on the imposition of penalties.

3. During the appeal hearing, the appellant did not contest the tax and interest amounts but challenged the imposition of penalties. It was established that the appellant had initially disclosed a lower value of service tax, which was later corrected by the Department's investigation at M/s Bajaj Auto Ltd. The Tribunal found that the appellant had consciously suppressed the service tax value, indicating mala fides. The lower authorities rightly imposed penalties under Section 76, 75A, and 77 of the Act. The penalty under Section 78 was reduced from Rs.96,326 to Rs.25,000 considering the circumstances. The Tribunal confirmed the penalties except for the modification in the quantum of penalty under Section 78, ultimately rejecting the appeal.

In conclusion, the Tribunal upheld the imposition of penalties under various sections of the Finance Act due to the appellant's conscious suppression of service tax value, indicating mala fides. The penalty under Section 78 was reduced, but the appeal was rejected, affirming the penalties imposed by the lower authorities.