2017 (11) TMI 97 - AT - Service Tax

Simultaneous Penalty u/s 76 and 77 - Held that - the issue is squarely covered in favor of the appellant in the case of Commissioner of Service Tax, Service Tax Commissionerate, Bangalore Versus AK & I Advertising Private Ltd. 2011 (7) TMI 1060 - Karnataka High Court wherein it has been consistently held that the penalty under provisions under section 76 and 78 cannot be simultaneously imposed - also, the Adjudicating Authority has given the benefit by observing that once penalty under section 78 is imposed, then no separate penalty under section 77 or 76 are mandated - appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against Commissioner (Appeals) order modifying original order, demand of Service Tax and Education Cess, interest on delayed payments, imposition of penalties under sections 76, 77, and 78.

Analysis:
1. Demand of Service Tax and Education Cess: The appellant received a show cause notice for Service Tax and Education Cess amounting to ?6,04,756 on taxable services for a specific period. The Additional Commissioner confirmed the demand and imposed penalties under various sections of the act. The revenue appealed against the dropping of penalties under sections 76 and 77, arguing they should be imposed. The Tribunal noted the judicial precedent and held that penalties under sections 76 and 78 cannot be simultaneously imposed. The impugned order was set aside in favor of the appellant based on established decisions.

2. Interest on Delayed Payments: The show cause notice also included interest demands on delayed payments for specific taxable services. The Additional Commissioner confirmed the interest demands along with the penalties imposed. However, the Tribunal found that penalties under sections 76 and 78 cannot be imposed simultaneously, following established decisions. Consequently, the impugned order was set aside, providing relief to the appellant.

3. Imposition of Penalties: The Commissioner (Appeals) allowed the appeal of the department and modified the original order by imposing penalties under section 78, which was reducible if paid within a specified period. The revenue contested the dropping of penalties under sections 76 and 77. The Tribunal, after considering submissions and various judgments, held that penalties under sections 76 and 78 cannot be imposed simultaneously. The impugned order was deemed unsustainable in law and set aside, granting relief to the appellant.

In conclusion, the Tribunal's judgment in this case addressed the issues of demand for Service Tax and Education Cess, interest on delayed payments, and the imposition of penalties under sections 76, 77, and 78. The decision was based on established legal principles and judicial precedents, providing relief to the appellant by setting aside the impugned order and allowing the appeal with consequential relief as necessary.