2023 (11) TMI 1169 - AT - Service Tax

Levy of penalty u/s 78 of Finance Act - Benefit of reduced penalty is available or not - entire amount of service tax demanded along with interest and penalty equal to 25% of the penalty imposed already paid - HELD THAT - In the written submissions of the appellant, the only request made is that the benefit of section 76 of the Act should be given to the appellant as it had already paid the entire amount of service tax demanded along with interest and penalty equal to 25% of the penalty imposed. It is found that this is a fact which needs to be verified. There is no dispute regarding the amount of service tax liability. The only issue that has to be seen is whether the appellant had deposited only Rs. 17,85,662/- as held by the original authority or it had deposited Rs. 13,87,713/- as asserted by the appellant. It also needs to be verified that whether the appellant had deposited 25% of the penalty of Rs. 13,87,713/- within 30 days to avail the benefit of the proviso to section 78 of the Act. The factual verification may be done by the original Benefit of section 76 of the Act by the original authority and if the entire amount of service tax, as asserted by the appellant, was already paid and the penalty under section 78 of the Act was also paid within 30 days, as asserted by the appellant, the appellant should have no grievance - the impugned order upheld - appeal dismissed.

Summary

Issues:
The issues involved in the judgment are related to the non-payment of service tax by the appellant for works contract services, imposition of penalties under various sections of the Finance Act, 1994, and the appeal against the order passed by the Commissioner (Appeals).

Non-Payment of Service Tax for Works Contract Services:
The appellant, a provider of construction services, was alleged to have not paid service tax amounting to Rs. 49,82,602/- for works contract services rendered between June 2007 to March 2011. The Additional Commissioner confirmed a demand of Rs. 13,85,662/- under proviso to section 73(1) of the Act, which was already paid by the appellant. The remaining part of the demand was dropped by the original authority as the services were rendered to government authorities and were exempt from service tax.

Imposition of Penalties:
The original authority confirmed the recovery of interest under section 75 of the Act and imposed penalties under sections 76, 77, and 78 of the Act on the appellant. The penalties included Rs. 100/- per day under section 76, Rs. 5,000/- under section 77, and Rs. 13,87,713/- under section 78 with an option of reduced penalty if paid within 30 days from the communication of the order. The Commissioner (Appeals) set aside the penalty under section 76 but upheld the remaining penalties imposed by the original authority.

Appeal Against the Order:
The appellant filed an appeal before the Tribunal seeking to set aside the order passed by the Commissioner (Appeals). Despite the absence of representation by the appellant, written submissions were provided, claiming that the entire service tax demand, interest, and 25% of the penalty under section 78 had been paid. The Tribunal found no issues to be decided and upheld the impugned order, directing the appellant to submit necessary documents to verify the payment of dues to the original authority.

Conclusion:
The Tribunal upheld the impugned order, dismissing the appeal and emphasizing the need for factual verification of the payments made by the appellant. The appellant was directed to provide documentation to demonstrate the payment of service tax, interest, and penalty within the required timeframes.