2009 (7) TMI 478 - AT - Service Tax

Non filing of return and payment of Service Tax Penalty The Appellants were rendering repair and maintenance service to Manglore Electricity supply Co. Ltd. The Appellants challenge was only towards the imposition of penalty. In this case Tri-(bang)-held that the Appellants are liable to be penalized as they have not filed the returns nor they have discharged the Service Tax liability for the period from 16-6-2005 to 31-3-2006. Failure to pay Service Tax would attract the provisions of Section 76. Hence, the penalty imposed under Section 76 is upheld. As regards the penalty imposed under Section 77 that Service Tax returns had to be filed by the appellant. As they have accepted the Service Tax liability for the period 16-6-2005 to 31-3-2006, the penalty imposed under Section 77 is also liable to imposed on the appellant and the same is upheld. As regards the penalty imposed under Section 78, that the learned Commissioner (A) in his first order dated 27-3-2007 had set aside the demand of Service Tax for the period 1-7-2003 to 15-6-2005 coming to a conclusion that there was no suppression of facts, fraud, mis-statement or collusion, as there was a correspondence between the appellant and the Superintendent/Authorities. Hence, the impugned order to the extent it upholds the penalty imposed under Section 78 is liable to be set aside.

Summary

Issues:
1. Appeal against Order-in-Appeal No. 305/2008 dated 17-12-2008.
2. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.
3. Challenge regarding penalties imposed by the Adjudicating Authority and upheld by the first appellate authority.

Analysis:

Issue 1:
The appeal was directed against Order-in-Appeal No. 305/2008 dated 17-12-2008. The appellants provided repair and maintenance services to a company without registering or paying Service Tax. The Adjudicating Authority confirmed the demand of Service Tax, Education Cess, and imposed penalties. The matter was remanded by the Commissioner of Central Excise (Appeals) and subsequently, penalties were imposed again. The appellants challenged the penalties on the grounds that the extended period of limitation could not be invoked against them.

Issue 2:
The penalties imposed under Sections 76, 77, and 78 were challenged. The Adjudicating Authority had imposed penalties under these sections, leading to the appeal. The appellant argued that penalties should not be imposed as there was no intent to evade payment of Service Tax. The learned JCDR contended that the appellant had not discharged the Service Tax liability, justifying the penalties.

Issue 3:
The appellant contested the penalties imposed under Sections 76, 77, and 78. The Tribunal upheld the penalties under Sections 76 and 77 as the appellants had not filed returns or paid the Service Tax liability for a specific period. However, the penalty under Section 78 was set aside. The Tribunal noted that Section 78 penalties could only be imposed in cases of suppression, fraud, collusion, or misstatement with an intent to evade payment, which was not established in this case.

In conclusion, the Tribunal upheld the penalties under Sections 76 and 77 but set aside the penalty under Section 78. The appeal was disposed of accordingly, with the penalties being adjusted based on the detailed analysis of each section and the specific circumstances of the case.