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2018 (2) TMI 1233 - AT - Service TaxVCES Scheme - extended period of limitation - penalty u/s 78 - penalty u/s 77 (2) for non registration - penalty u/s 70 for late fees. Held that - as regards extended period, in this case, the SCN has been issued on 24.12. 2014 for the period 01.04.2009 to December 2012 - Admittedly the period from 01.04.2009 to 30.09.2009 is beyond the extended period of limitation, therefore, the demand of service tax for the period 01.04.2009 to 30.09.2009 is set-aside as time barred - penalty also to be reduced to that extent. Penalty u/s 78 - Held that - Admittedly the appellant has filed declaration on VCES Scheme, 2013 wherein the appellant has declared a sum of ₹ 1,43,685/-. The said amount is also found in the demands as per the SCN, therefore, the said amount is required to be reduced from the total demand and the penalty is also modify, therefore, penalty u/s 78 of the FA, 1994 is reduced - Penalty under Section 78 of the Finance Act, 1994 is confirmed equivalent to reduced service tax demand. Penalty u/s 77 (2) and 70 of the Act - Held that - Admittedly when the appellant was not registered with the service tax department, the penalty has been imposed if the said penalty has been imposed, therefore, no penalty for the less payment of service tax cannot be imposed on the appellant under Section 77 (2) of the Finance Act, 1994 - penalty imposed under Section 77 (2) is set-aside. Appeal allowed in part.
Issues:
- Appeal against impugned order seeking relief on merits - Correct declaration under VCES Scheme 2013 - Demand of service tax for the period beyond five years - Penalty under Section 78 of the Finance Act, 1994 - Penalty under Section 77 (2) for non-registration - Penalty under Section 70 for less payment of service tax Analysis: The appellant appealed against an impugned order seeking relief on merits, related to a declaration under the VCES Scheme 2013. The appellant initially declared a service tax payable amount, which was later found to be incorrect. A show cause notice was issued for the period 2009-2010 to 2012-2013, demanding a significant service tax amount. The matter was adjudicated, confirming the service tax demand with interest and penalties under various sections of the Finance Act, 1994. The appellant contended that the demand beyond five years was not sustainable and argued for a reduction in penalties. Regarding the demand for the period beyond five years, the Tribunal found that the show cause notice was issued beyond the extended period of limitation for a portion of the period in question. As a result, the demand of service tax for that specific period was set aside as time-barred, leading to a corresponding reduction in penalties. In terms of the penalty under Section 78 of the Finance Act, 1994, the Tribunal noted that the penalty was imposed equivalent to the confirmed service tax amount. However, since the appellant had declared a specific sum under the VCES Scheme 2013, which matched the demand in the show cause notice, the penalty was required to be reduced accordingly. Consequently, the penalty under Section 78 was reduced in line with the adjusted service tax demand. Regarding penalties under Sections 77 (2) and 70 of the Finance Act, 1994, the Tribunal observed that the penalty for non-registration under Section 77 (2) could not be imposed when the appellant was not registered with the service tax department. Therefore, the penalty under Section 77 (2) was set aside, providing relief to the appellant from that specific penalty. In conclusion, the Tribunal passed an order reducing the service tax demand by specific amounts, confirming the penalty under Section 78 of the Finance Act, 1994, and setting aside the penalty imposed under Section 77 (2). The appeal was disposed of based on these determinations.
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