2012 (7) TMI 411 - AT - Service Tax

Penalty u/s 76 - assessee submitted that major amount of tax was paid when he came to know that its liability arose - Held that - The case is remanded back to bring to record about the date on which liability arose, date of return ought to have been filed, date on which admitted tax liability should have been discharged and the date of discharge of duty liability.

Summary

Issues:
1. Whether penalty under Section 76 of Finance Act, 1994 is leviable when taxes were partially paid leaving a small amount of recovery on adjudication.
2. Whether the appellant is entitled to benefit under Section 80 of Finance Act, 1994.

Analysis:
1. The dispute in both appeals revolves around the imposition of penalty under Section 76 of the Finance Act, 1994, considering the scenario where the appellant asserts that taxes were paid, albeit leaving a shortfall upon adjudication. The appellant contends that the majority of the tax liability was settled upon realization of the obligation, with only a small amount remaining for recovery. Notably, there is an argument put forth by the appellant suggesting potential entitlement to relief under Section 80 of the Finance Act, 1994. The absence of any finding regarding the suppression of facts by the authorities below is highlighted, as the Adjudicating authority refrained from imposing a penalty under Section 78 of the Finance Act, 1994. While acknowledging the partial payment made by the appellant and recognizing their non-default status to the extent of the sum remitted to the Revenue, it is emphasized that accountability persists for the remaining shortfall, necessitating scrutiny under the law.

2. The appellant's plea for consideration under Section 80 of the Finance Act, 1994 prompts the need to establish specific details for assessment. It is deemed crucial to document the date of liability inception, the requisite filing date for returns, the timeline for discharging admitted tax liability, and the date of duty liability settlement. Clarity on these particulars is deemed essential for the competent authority to effectively evaluate the appellant's eligibility for the benefits outlined in Section 80 of the Finance Act, 1994. Consequently, the appeals are remanded to the Adjudicating Authority for a comprehensive examination based on the aforementioned parameters to facilitate a well-founded decision regarding the imposition of penalties under Section 76 of the Finance Act, 1994. The disposal of the appeals is contingent upon this specific aspect, emphasizing a remand solely for this limited purpose.