2017 (7) TMI 561 - AT - Service Tax

Penalties u/s 76 and 78 - GTA services - works contract - case of appellant is that the works contract services provided by them to their client is exempted, thus they are under bonfide belief that they are not liable to pay service tax on the GTA service received by them - Held that - provision of services under works contract has no relation with liability of appellant to pay service tax on the transportation service received by them. Provisions of works contract service to their client which may or may not be exempted has no relation whatsoever with they are liable for tax with the GTA service. We find that there is no ground of having any bonafide belief in favor of the appellant. Simultaneous penalty u/s 76 and 78 - Held that - reliance placed in the case of Commissioner of Central Excise Versus M/s. Pannu Property Dealers, Ludhiana 2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT , where it was held that penalties under Section 76 and 78 can be imposed simultaneously. Appeal dismissed - decided against appellant.

Summary

Issues: Appeal against demand and penalties on GTA services; Contesting imposition of penalties under Section 76 and 78 for the period before 10-5-2008; Appellant's belief in exemption from service tax; Interpretation of penalties under Sections 76 and 78; Simultaneous imposition of penalties.

Analysis:
The appeal was filed by M/s. Arti Infra Project Pvt Ltd challenging the confirmation of demand and penalties imposed on GTA services received by them. The demand in question pertained to periods before and after 11-5-2008, with penalties imposed under Sections 76 and 78 for the period before 10-5-2008. The appellant did not contest the demand but challenged the penalties, citing a High Court decision. The Revenue relied on the impugned order, leading to the Tribunal's consideration of both sides' submissions.

The crux of the matter revolved around the appellant's belief that their works contract services, exempted from service tax, extended to the GTA services received. However, the Tribunal found no merit in this argument, emphasizing that the provision of works contract services did not absolve the appellant from liability to pay service tax on GTA services. The Tribunal referenced a High Court decision to support the view that penalties under Sections 76 and 78 could be imposed simultaneously, especially when the offenses arise from the same transaction or act.

The Tribunal further examined a decision by the Board of Control for Cricket in India, where the simultaneous imposition of penalties under Sections 76 and 78 was upheld. The Tribunal noted that while penalties could be imposed concurrently before 10-5-2008, post-amendment only one penalty would apply. The Tribunal dismissed the appeal, affirming the lower authorities' detailed reasoning for the simultaneous imposition of penalties under Sections 76 and 78. The judgment was pronounced on 08-06-2017, upholding the penalties on GTA services received by the appellant.