2012 (8) TMI 786 - AT - Service Tax

Penalty under Section 76 of the Finance Act Held that - Appellant had paid the service tax and the interest as soon as the same was pointed out during the adjudication process and paid the penalty under Section 78 to the extent of 25% as per the law and is not contesting the penalty under Section 77 of Finance Act, 1994 - penalty imposed under Section 76 is not sustainable

Summary

Issues:
- Whether penalty is leviable under Section 76 of the Finance Act, 1994.

Analysis:
1. The Appellate Tribunal CESTAT, Ahmedabad considered the issue of penalty under Section 76 of the Finance Act, 1994. The appellant, engaged in providing Business Auxiliary Service and Erection, Commissioning, and Installation Service, was found to have not assessed the service tax correctly for the period from 2004-2005 to 2007-2008, resulting in a liability of Rs. 84,261. The appellant admitted the service tax liability and paid the amount with interest after it was pointed out by the department. Additionally, a penalty of 25% under Section 78 was also paid. The appellant did not contest the penalty under Section 77 but sought a waiver of the penalty under Section 76, arguing that it was not imposable based on the circumstances of the case and citing relevant tribunal decisions.

2. The Tribunal reviewed the submissions and noted that previous decisions indicated that penalties under Section 76 and Section 78 need not be imposed together in all cases, even for periods prior to 2008. Considering that the appellant promptly paid the service tax, interest, and the penalty under Section 78 as required by law, and did not contest the penalty under Section 77, the Tribunal found the penalty under Section 76 to be unsustainable in this case. Therefore, the Tribunal confirmed the demand for service tax, penalty under Section 77, interest on service tax, and the penalty already deposited under Section 78 of the Finance Act, 1994, as they were not contested by the appellant.