2009 (9) TMI 47 - AT - Service Tax

Waiver of penalty section 76 and 78 held that - The period of dispute of this case is 2002 to 2005 and during this period, for non-payment of service tax with intent to evade the same, penalty were imposable under Section 78 and as well as 76 and there was no specific provision that when penalty under Section 78 is imposable, the penalty under Section 76 would not be imposable - order of commissioner (appeals) setting aside the penalty under Section 76 is not sustainable and the same is set aside. The Assistant Commissioner s order with regard to imposition of penalty under Section 76 is restored. Revenue s appeal is allowed.

Summary

Issues:
- Appeal by Revenue against order-in-appeal upholding service tax demand and penalty under Section 78 but setting aside penalty under Section 76.
- Respondent filed cross objection requesting decision on merit.
- Interpretation of penalty imposable under Section 78 and 76 for non-payment of service tax during 2002-2005.

Analysis:
- The appeal was filed by the Revenue against an order-in-appeal that upheld the service tax demand and penalty under Section 78 but set aside the penalty under Section 76. The Commissioner (Appeal) had set aside the penalty under Section 76 on the ground that penalties under both Section 76 and 78 cannot be imposed simultaneously.
- The respondent filed a cross objection requesting a decision on merit, which was considered by the Tribunal.
- The issue revolved around the interpretation of penalties imposable under Section 78 and 76 for non-payment of service tax during the period of 2002 to 2005. The Tribunal noted that there was no specific provision stating that when penalty under Section 78 is applicable, penalty under Section 76 cannot be imposed.
- The Tribunal referred to judgments by the Hon'ble High Court of Karnataka and a Division Bench of the Tribunal in similar cases where it was held that penalties under both Section 76 and 78 can be imposed simultaneously. Based on these precedents, the Tribunal found in favor of the Revenue and set aside the order that had previously canceled the penalty under Section 76. The Assistant Commissioner's order imposing penalty under Section 76 was restored, and the Revenue's appeal was allowed.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented, and the Tribunal's decision based on legal precedents and interpretations of relevant sections of the law.