2015 (7) TMI 187 - AT - Service Tax

Penalty u/s 78 - Held that - suppression of facts with intention to evade payment of duty by the appellant has been established beyond doubt, the adjudicating authority has rightly invoked extended period and imposed equal penalty under Section 78 of the Act. Further, I find that the appellant has paid the interest and also 25% of the penalty imposed under Section 78 of the Act within 30 days of receipt of the adjudication order. Therefore, I do not find any merit in the appellant s contention for waiver of penalty under Section 78 of the Act. In the case of Global Facility Management Services Pvt. Ltd. (2013 (5) TMI 230 - CESTAT CHENNAI), the Tribunal upheld the penalty imposed under Section 78 of the Act. - Decided against assessee.

Summary

Issues: Waiver of penalty under Section 78 of the Finance Act

The judgment pertains to an appeal arising from an Order-in-Appeal issued by the Commissioner (Appeals) regarding the waiver of penalty under Section 78 of the Finance Act. The appellant did not appear, despite multiple adjournments, and the matter related to the payment of service tax before the issuance of a show cause notice. The Lower Appellate Authority confirmed a demand and imposed a penalty under Section 78, which was upheld by the Commissioner (Appeals). The key issue revolved around whether the penalty under Section 78 should be waived, considering the circumstances of the case.

The Learned Authorized Representative (AR) argued that the appellant collected the service tax but failed to remit it to the department, leading to the imposition of penalties. The Commissioner (Appeals) waived penalties under Sections 76 and 77 but upheld the penalty under Section 78, citing a precedent from the Tribunal. Upon reviewing the case records, it was evident that the appellant had collected a significant service tax amount but did not remit it to the government until detected by the department. The adjudicating authority invoked the extended period and imposed a penalty under Section 78, considering the established suppression of facts by the appellant to evade duty payment. The appellant had paid interest and a portion of the penalty promptly, but the waiver of the penalty under Section 78 was not deemed meritorious due to the intentional evasion of duty.

The Tribunal, referencing the case of Global Facility Management Services Pvt. Ltd., upheld the penalty under Section 78 in similar circumstances. Consequently, the presiding Member found no fault in the impugned order and rejected the appeal, thereby upholding the decision regarding the penalty under Section 78 of the Finance Act. The judgment was pronounced and dictated in the open court, concluding the legal proceedings on the matter.