2013 (12) TMI 918 - AT - Service Tax

Levy of penalty u/s 76 and 78 waiver of penalty u/s 80 - Service Tax on Agent Held that - appellants paid the entire amount before issue of Show Cause Notice - provision of section 80 are invokable in the present case following the decision of Allahabad High Court in Commissioner Of Central Excise Versus M/S Auto World 2010 (1) TMI 21 - ALLAHABAD HIGH COURT - We therefore set aside the penalties under section 76, 78 of the Act - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalties under sections 76 and 78 of the Act.
2. Applicability of section 80 in the case.

Analysis:

Issue 1: Imposition of penalties under sections 76 and 78 of the Act

The appeal was filed against an Order-in-Original passed by the Commissioner of Service Tax Delhi, imposing penalties under sections 76 and 78 of the Act on the appellants, who were authorized dealers of Honda cars. The Tribunal initially set aside the penalties under sections 76 and 78. However, the Delhi High Court held that the Tribunal was wrong in deleting the penalty under Section 78 as the corrigendums issued clearly involved section 78. The High Court also noted that the Tribunal deleted the penalties without examining the factual matrix and remanded the matter back to the Tribunal for a fresh decision.

Issue 2: Applicability of section 80 in the case

The appellants argued that there was no malafide intent on their part and relied on a judgment of the Allahabad High Court in the case of Auto World to support their contention. They highlighted that they had paid the entire service tax along with interest before the issuance of the show cause notice. The Tribunal found that the facts of the present case were similar to the Auto World case, where the assessee had paid the service tax partly before the show cause notice and partly before the adjudication order. The Tribunal noted that the conduct of the present appellants was better as they had paid the entire amount before the show cause notice was issued. Therefore, the Tribunal invoked the provision of section 80 and set aside the penalties under sections 76 and 78 of the Act, ultimately allowing the appeal.

In conclusion, the Tribunal decided to set aside the penalties under sections 76 and 78 of the Act based on the applicability of section 80 and the similarities between the present case and the Auto World case as per the judgment of the Allahabad High Court.