2009 (7) TMI 99 - AT - Service Tax

Penalty Waiver under section 80 - The appellant submitted that the proprietor of the firm met with an accident and he was undergoing treatment during the relevant period therefore as per the provisions of Section 80 of the Finance Act, penalty is not sustainable held that - during the period the appellants were providing service to various clients and the business was running and they were also registered with the Revenue authorities as provider of C&F service. However, they have not disclosed the true and full facts regarding the amounts received from their customers as provider of service. Therefore, the appellants had not made out a case to avail the benefit of Section 80 of the Finance Act penalty sustained.

Summary

Issues:
1. Imposition of penalties under Section 77 and 78 of the Finance Act.
2. Alleged suppression by the appellant to evade Service Tax.
3. Appellant's argument of no suppression due to unavoidable circumstances.
4. Revenue's claim of non-disclosure of providing services to specific clients.
5. Applicability of Section 80 of the Finance Act for penalty imposition.

Analysis:

1. The appellant challenged the penalties imposed under Section 77 and 78 of the Finance Act, contending that there was no suppression on their part to evade Service Tax. They argued that the delay in paying the tax was due to the proprietor's accident and subsequent medical treatment. The appellant invoked Section 80 of the Finance Act to support their position that the penalty was not sustainable.

2. The Revenue's position was that the appellant, registered as a clearing and forwarding agency service provider, did not disclose providing services to specific clients, namely M/s. Philips India Ltd. and Anarelecs Pvt. Ltd., resulting in non-payment of Service Tax on the gross amount received from these clients. Revenue asserted that penalties were rightly imposed due to this non-disclosure.

3. The Revenue discovered the non-disclosure of services provided to M/s. Philips and M/s. Anarelecs only upon visiting the appellant's premises. This led to the conclusion of clear suppression by the appellant with the intent to evade tax. The appellant's argument regarding the proprietor's medical treatment during the relevant period was considered in light of the non-disclosure issue.

4. The Tribunal noted that while the appellant was registered and providing services to various clients, they failed to disclose complete information about the amounts received from clients, thereby not meeting the requirements to benefit from Section 80 of the Finance Act. Consequently, the Tribunal dismissed the appeal, upholding the imposition of penalties under Section 77 and 78 of the Finance Act.

5. The judgment, delivered by Shri S. S. Kang, Vice President, concluded that the appellant's failure to disclose crucial information regarding the services provided and amounts received prevented them from availing the relief under Section 80 of the Finance Act. The decision was pronounced in the open court on 27/7/09, dismissing the appeal against the penalties imposed by the Revenue.