2017 (7) TMI 169 - AT - Service Tax

Penalty u/s 76 and 77 - invocation of section 80 - Held that - we find that the order of Commissioner (Appeals) dated 27.12.2012 has already been set aside by the Tribunal on the issue of confirmation of demand of Service Tax and interest and imposition of penalty under Section 77 - we have no option but to allow the issue regarding setting aside of penalties under section 80 by the same order also to be remanded to the Commissioner (Appeals) for fresh adjudication - appeal allowed by way of remand.

Summary

Issues: Appeal against confirmation of demand of duty and interest, imposition of penalty under Section 77, benefit of Section 80, remand proceedings, challenge to invocation of Section 80, remand for fresh adjudication.

Analysis:

1. The case involved an appeal against an Order-in-Original confirming the demand of duty and interest and imposing penalties under Section 77 of the Finance Act, 1994. The Additional Commissioner of Service Tax had imposed the penalties, but extended the benefit of Section 80 in respect of certain penalties. Both the Revenue and the appellant filed appeals before the Tribunal. The Tribunal's Order No. A/1709/13/CSTB/C-I dated 12.08.2013 set aside the Commissioner (Appeals) order and remanded the matter back for fresh decision.

2. Subsequently, in the remand proceedings, the Commissioner (Appeals) confirmed the demand of duty and interest, but set aside the penalty under Section 77 invoking Section 80 of the Finance Act, 1994. This decision led to a fresh appeal before the Tribunal by the appellant, challenging the Commissioner's decision.

3. The Commissioner (Appeals) had observed that the appellant was eligible for the benefit of Section 80 and, therefore, the penalties imposed under Section 77 should also be waived. However, the Tribunal noted that the earlier order of the Commissioner (Appeals) had been challenged by the Revenue, specifically regarding the invocation of Section 80. As a result, the Tribunal set aside the Commissioner (Appeals) order dated 11.2.2015 and remanded the matter for fresh adjudication.

4. Ultimately, the Tribunal allowed both appeals by way of remand, emphasizing the need for a fresh decision on the issue of setting aside penalties under Section 80. The case highlights the importance of proper adjudication and consideration of all legal aspects in tax matters to ensure fairness and compliance with the law.