2014 (12) TMI 1134 - AT - Service Tax

Penalty u/s 77 5, 000/-. In these circumstances we do not find substance in the appeal filed by the Revenue - Decided in favour of assessee.

Summary

Issues:
1. Appeal for withdrawal of the appeal by M/s. Ahinsha Properties Ltd.
2. Imposition of penalty under Section 77 of the Finance Act, 1994.

Analysis:

1. Appeal for withdrawal of the appeal by M/s. Ahinsha Properties Ltd.:
The appellant, M/s. Ahinsha Properties Ltd., requested withdrawal of their appeal as they had paid the entire amount of Service Tax, interest, and a portion of the penalty. The appellant's representative reiterated the withdrawal request, stating that they are no longer interested in pursuing the appeal. The Revenue did not object to the withdrawal request. Consequently, the appeal filed by M/s. Ahinsha Properties Ltd. was dismissed as withdrawn.

2. Imposition of penalty under Section 77 of the Finance Act, 1994:
The Revenue filed an appeal seeking the imposition of penalty under Section 77 of the Finance Act, 1994. The Revenue argued that the penalty equivalent to Service Tax was imposed under Section 78, but no penalty was imposed under Section 77. The Tribunal examined the second proviso to Rule 7C of the Service Tax Rules, 1994, which states that if the assessee has paid the prescribed amount for delayed submission of return, the proceedings related to the delay shall be deemed concluded. The Commissioner had imposed a penalty under Section 78, equivalent to the Service Tax short paid. Since M/s. Ahinsha Properties Ltd. had paid the entire amount due, including the penalty, the Tribunal held that the case fell under the second proviso to Rule 7C. The Tribunal also noted that Section 77 of the Finance Act is applicable in specific circumstances where no penalty is specified elsewhere, with a maximum penalty of Rs. 5,000 at the relevant time. As all dues were paid, the Tribunal found no merit in the Revenue's appeal and dismissed it. Consequently, both the appeals filed by the Revenue and the assessee were dismissed.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT KOLKATA highlights the issues involved, the arguments presented by the parties, and the Tribunal's reasoning leading to the dismissal of the appeals.