2019 (6) TMI 727 - AT - Service Tax

Valuation - inclusion of certain charges recovered by them for issue of Air way bills - demand alongwith penalty - HELD THAT - The liability for differential service tax has not been challenged, hence the differential service tax already paid with interest is not to be interfered with. In the circumstances of the case, in which the entire differential service tax arising on account of inadvertent omission on the part of the appellant, has already been paid, we waive the penalties imposed under Section 80 of the Finance Act, 1994. Appeal disposed off.

Summary

Issues Involved: Appeal against Order-in-Appeal regarding inclusion of charges in taxable service value, imposition of penalties under Sections 76 and 78.

Analysis:
1. Inclusion of Charges in Taxable Service Value:
The appellant, a service provider to exporters, was found to have not included certain charges for issuing Air way bills in the value of taxable service during the period 1.4.2004 to 31.3.2005. This omission led to a show-cause notice being issued, resulting in an Order-in-original dated 28.2.2007 demanding payment of differential service tax amounting to ?30,820 along with interest. The Commissioner (A) upheld this order, leading to the present appeal. The appellant did not dispute the demand for service tax, which had already been paid along with interest. The Tribunal noted that the liability for the differential service tax was not challenged, and the amount had been paid with interest. Therefore, the Tribunal did not interfere with the differential service tax payment.

2. Penalties Imposed under Sections 76 and 78:
Along with the demand for service tax, penalties under Sections 76 and 78 were imposed on the appellant. The appellant had already paid the penalty under Section 78, but requested for a waiver of the same. The Tribunal considered the circumstances of the case, where the entire differential service tax arising from an inadvertent omission by the appellant had been paid. In light of this, the Tribunal decided to waive the penalties imposed under Section 78 of the Finance Act, 1994. The order was disposed of accordingly, with the penalties under Section 78 being waived.

In conclusion, the Tribunal upheld the demand for service tax, which had already been paid by the appellant along with interest. The penalties imposed under Section 78 were waived due to the inadvertent nature of the omission that led to the demand. The appeal was disposed of in favor of the appellant with the penalties under Section 78 being waived.