2018 (7) TMI 530 - AT - Service Tax

Restoration of appeal - Penalty u/s 11AC - Interior Decorators/Design Service - Manpower Supply Recruitment /Supply Service etc - Held that - There is no material available on record for suppression of facts with intent to evade payment of duty. Hence, the imposition of penalty under Section 11AC of the Act is unwarranted - penalty set aside - application of restoration of appeal is also allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Restoration of Appeal, Imposition of Penalty under Section 78 of the Finance Act, 1994

Restoration of Appeal:
The judgment addresses an application seeking the restoration of an Appeal that was dismissed earlier by the Tribunal. The Counsel for the appellant explained that the written submissions, as instructed by the Bench, were filed but not placed before the Bench on the date of the hearing. Considering the reasons provided, the order dismissing the Appeal was recalled, and the Appeal was restored to its original number. Subsequently, with the consent of both sides, the Appeal itself was taken up for final hearing.

Imposition of Penalty under Section 78 of the Finance Act, 1994:
The main ground of the Appeal was regarding the imposition of a penalty under Section 78 of the Finance Act, 1994. The appellant contended that the show-cause notice was initially issued for a demand of a specific amount, which was later modified by the Adjudicating Authority. The Counsel argued that the appellant had regularly filed returns with the Department, indicating that the activity was known to the Department, making allegations of willful misstatement, suppression of facts, and intent to evade payment of service tax unsustainable. The Adjudicating Authority had confirmed a reduced demand, which the appellant had paid. The Tribunal found that there was no evidence of suppression of facts to evade payment of duty, leading to the setting aside of the penalty imposed under Section 11AC of the Act. Consequently, the Appeal was allowed, and the restoration application was also granted. Additionally, an application for additional evidence was disposed of.

This judgment highlights the procedural aspect of restoring an Appeal and delves into the substantive issue of the imposition of a penalty under the Finance Act, 1994. The decision was based on the lack of evidence supporting the allegation of willful misstatement or suppression of facts by the appellant, ultimately resulting in the setting aside of the penalty. The detailed analysis provided by the Tribunal showcases a fair consideration of the arguments presented by both sides, leading to a favorable outcome for the appellant in this case.