2015 (11) TMI 331 - AT - Service Tax

Imposition of interest and penalty - GTA service, Supply of Tangible Goods Service and Management, Maintenance & Repair Service - Held that - Strangely the Review order does not challenge the concessional penalty extended by learned Adjudicating authority. It has come to erroneous conclusion that no penalty was levied under Section 78 of the Finance Act, 1994. Revenue has made the observations erroneously without any reason recorded in review order. Learned Adjudicating authority did not impose penalty under Section 78 of the Finance Act, 1994 in respect of GTA Service and Supply of Tangible Goods Service since tax liability was discharged under proviso to Section 73 (1) of Finance Act, 1994. His decision does not appear to be unreasonable. - Decided against Revenue.

Summary

Issues:
1. Levy of interest and penalty under Section 78 of the Finance Act, 1994.
2. Imposition of penalty on GTA service, Supply of Tangible Goods Service, and Management, Maintenance & Repair Service.
3. Review of the Commissioner's order and the imposition of penalty.

Analysis:
1. The Revenue was aggrieved due to the non-levy of interest and penalty under Section 78 of the Finance Act, 1994. The Adjudicating authority examined all three services provided by the Respondent, and while penalty was imposed for site formation and clearance service, a concession was granted, limiting the penalty to 25% of the service tax amount. The Respondent did not appeal against this decision, indicating no grievance with the Commissioner's order.

2. The Review order incorrectly concluded that no penalty was imposed under Section 78, even though the Adjudicating authority did not levy penalties for GTA Service and Supply of Tangible Goods Service as the tax liability was discharged under a specific provision. The Tribunal found the Commissioner's order to be legally sound and upheld it. The Revenue's concern regarding interest was noted, and the Adjudicating authority was directed to determine any deficiency in tax discharge, with interest to be imposed accordingly if applicable.

3. The Tribunal dismissed the Revenue's appeal, highlighting the erroneous observations in the Review order and affirming the Commissioner's decision regarding penalty imposition. The Adjudicating authority was tasked with assessing any tax liability deficiency for interest calculation. Overall, the judgment maintained the penalty imposition for specific services while addressing the Revenue's concerns regarding interest under Section 78 of the Finance Act, 1994.