2010 (4) TMI 193 - AT - Service Tax

Business Auxiliary Service- Appellant is engaged in marketing and selling of offset printing machines and printing relating products of various manufacturers and is working as a commission agent. Appellant took registration under the category of business auxiliary service. The appellants paid the service tax with interest. Held that- penalties under Section 76 & 78 of Finance Act 1994 are distinct and separate and penalties can be imposed under both the sections. In view of the facts and circumstances discussed above and judicial precedence cited by the learned DR I find no merits in the appeal and accordingly reject the same.

Summary

Issues:
1. Liability to pay service tax by the appellant.
2. Delay in payment of service tax by the appellant.
3. Imposition of penalties under Section 75A, 76 & 78 of Finance Act, 1994.

Issue 1: Liability to pay service tax by the appellant

The appellant, engaged in marketing and selling offset printing machines as a commission agent, registered under business auxiliary service category on 24.11.05. However, no service tax was paid until the partner admitted liability during investigation. The partner acknowledged the service tax liability due to commission income and financial difficulties causing delayed registration and payment. The appellants subsequently paid the service tax with interest. The Tribunal noted the agreement by the Chartered Accountant that service tax was due, emphasizing the lack of dispute regarding the liability.

Issue 2: Delay in payment of service tax by the appellant

The delay in payment of service tax by the appellant was a focal point during the proceedings. The appellant's financial difficulties were cited as a reason for the delayed payment, with the Chartered Accountant requesting leniency in penalties under Section 80 of the Finance Act, 1994. However, the Departmental Representative argued against leniency, highlighting the significant turnover of the appellant over two years exceeding Rs. 42 lakhs. The Tribunal considered the arguments and emphasized the lack of immediate payment even after admission of liability, leading to the conclusion that no leniency was warranted.

Issue 3: Imposition of penalties under Section 75A, 76 & 78 of Finance Act, 1994

The Tribunal referenced judicial precedents and legal provisions to address the imposition of penalties under Section 75A, 76 & 78 of the Finance Act, 1994. Citing the case of Camlin Ltd. Vs. CCE Mumbai, it was noted that a bonafide belief does not excuse delayed compliance. Additionally, the Tribunal referred to the case of Krishna Poduval where the High Court of Kerala upheld the distinct and separate nature of penalties under Section 76 & 78. Considering the precedents and the circumstances of the case, the Tribunal rejected the appeal, emphasizing the lack of merit based on the facts presented and legal precedents cited by the Departmental Representative.

This detailed analysis of the judgment highlights the issues of liability to pay service tax, delay in payment, and the imposition of penalties under the Finance Act, 1994, providing a comprehensive overview of the Tribunal's decision in this case.