2010 (2) TMI 233 - AT - Service Tax

Penalty- The appellant is engaged in the business of providing services as cable operator. The appellant filed detailed submissions before the lower authority, the learned Assistant Commissioner after giving due consideration to the submissions confirmed the tax demand to the extent of Rs.74,451/- charged interest under Section 75 and imposed the penalties under Section 77 & 78 of Finance Act, 1994. Held that- I find that the Tribunal s decision which relied upon the decision of Karnataka High Court is applicable to the present case on facts and therefore, the appeal filed by the appellant is allowed.

Summary

Issues:
1. Tax demand confirmation with interest and penalties under different sections of the Finance Act, 1994.
2. Imposition of penalty under Section 76 by the Commissioner after the Assistant Commissioner refrained from doing so.
3. Applicability of the Tribunal's decision in a similar case.

Analysis:
1. The appellant, engaged in providing services as a cable operator, faced a tax demand confirmed by the Assistant Commissioner, along with interest and penalties under Sections 75, 77, and 78 of the Finance Act, 1994. The appellant paid the demanded tax, interest, and penalties as per the Assistant Commissioner's order.

2. Subsequently, the Commissioner reviewed the case and imposed a penalty under Section 76 of the Finance Act, 1994, equal to the service tax amount payable. The appellant, citing legal precedents, argued against this penalty, highlighting the decision in the case of M/s Solomon Foundry Vs. CCE Tiruchirapalli and the judgment of the Hon'ble High Court of Karnataka in the case of CCE Vs. Sunitha Shetty. The appellant contended that the revisionary authority should not revise the decision of the competent authority, which consciously refrained from imposing a penalty under Section 76.

3. The Tribunal, considering the appellant's submissions and the legal precedents cited, found merit in the argument. The Tribunal noted that the Assistant Commissioner, in the initial order, had exercised the power under Section 80 and did not impose a penalty under Section 76, while penalties under Sections 77 & 78 were imposed. By relying on the decision of the Karnataka High Court and the Tribunal's previous ruling, the Tribunal allowed the appeal filed by the appellant, emphasizing the consistency in the application of penalties under different sections of the Finance Act, 1994.

This detailed analysis of the judgment highlights the issues of tax demand confirmation, penalty imposition under different sections, and the application of legal precedents in deciding the case.