2018 (6) TMI 1083 - AT - Service Tax

Penalty u/s 76, 77 and 78 of FA - Business Auxiliary Services - service tax not paid - intent to evade not present - Held that - The service tax amount has already been paid by the Appellant - the Appellant shall be liable to pay only 25% of the penalty u/s 78 subject to the condition that the same is paid alongwith interest within 30 days of the receipt of this order by the Appellant.. Penalty u/s 76 and 77 - the penalty u/s 77 (a) for failure to take registration, Penalty under section 77 (b) for failure to maintain record have been imposed - Held that - The penalty u/s 76 and 77 is reduced to ₹ 2500/- each. Appeal allowed in part.

Summary

Issues:
Appeal against Order-in-appeal on demand raised for Business Auxiliary Services; Contesting penalty imposition without challenging demand on merits.

Analysis:
The appeal was filed against the Order-in-appeal dated 04.12.2013 passed by the Commissioner (Appeals), Nagpur, regarding a demand raised for Business Auxiliary Services. The Appellant, represented by a consultant, contested the penalty imposition without disputing the demand on its merits. The consultant argued that the non-payment of service tax was not intentional to evade taxes and highlighted that the amount in question, ?1,92,343, covering the period from April 2008 to March 2012, had already been paid.

The Assistant Commissioner representing the revenue reiterated the findings of the impugned order, emphasizing the non-payment of service tax as the basis for imposing the penalty. After hearing both sides, the Tribunal noted that penalties under various sections were imposed on the Appellant, including failure to take registration, maintain records, and non-payment of service tax. However, it was observed that the Appellant was not given the option to pay a reduced penalty of 25% as provided under the relevant section 78. Referring to legal precedents and circulars, the Tribunal held that the Appellant should only pay 25% of the penalty under section 78, provided it is paid along with interest within 30 days of receiving the order. Additionally, the penalties under sections 76 and 77 were reduced to ?2500 each.

In conclusion, the impugned order was modified to reflect the Tribunal's decision on penalty imposition. The appeal was disposed of accordingly, with the judgment pronounced on 05/06/2018.