2016 (3) TMI 11 - AT - Service Tax

Confirmation of demand for unspecified service tax amount with interest thereon - it was argued that the show-cause notice did not specify the amount of tax payable at all and therefore the original adjudicating authority could not have confirmed the demand for any amount or appropriate any amount. - levy of of penalty - Held that - The show-cause notice simply stated that October 2003 onwards, the appellant had not filed the returns at all. more over the show-cause notice did not even specify the amount payable by the appellant. According to provisions of Section 73(1) of Finance Act, 1994, whenever any service tax has not been paid or short paid, a notice has to be issued requiring the assessee to show-cause as to why he should not pay the amount specified in the notice. What is clear from the show-cause notice is that the show-cause notice speaks of non-filing of return from October 2003 and does not specify any amount to be paid by the assessee. It is a statutory requirement that amount to be paid has to be indicated in the show-cause notice and in the adjudication proceedings, the adjudicating authority is required to determine the amount payable as per the provisions of Section 73(2) of Finance Act, 1994. Therefore I find that the submission of learned counsel that confirmation of the demand or confirmation of the amount paid and appropriation thereto is totally incorrect and not valid is correct. The confirmation of demand, appropriation of the amount paid towards demand and interest and penalties under Section 76 and 78 of Finance Act, 1994 cannot be sustained. The only penalty that can be sustained is the amount of ₹ 3000/- imposed under Section 77 for non-submission of the returns. - Decided in favor of assessee.

Issues:
1. Confirmation of demand for unspecified service tax amount with interest and penalties under various Sections of Finance Act, 1994.
2. Imposition of penalties under Sections 76, 77, and 78 of Finance Act, 1994.
3. Validity of show-cause notice specifying the amount payable.
4. Applicability of penalties for non-filing of returns and delayed payment of tax.

Analysis:
1. The original adjudicating authority confirmed the demand for unspecified service tax amount with interest and imposed penalties under various Sections of Finance Act, 1994. The Commissioner(Appeals) remanded the matter, leading to multiple orders and appeals challenging the penalties imposed.

2. The imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994 was a crucial issue. The Commissioner(Appeals) upheld the penalties, leading to further challenges and remands by the Tribunal to properly address the penal liability of the assessee and pass a speaking order.

3. The validity of the show-cause notice specifying the amount payable was contested. The show-cause notice lacked a specific amount, raising concerns about the confirmation of demand and imposition of penalties. The Tribunal highlighted the statutory requirement for the amount to be indicated in the notice and the need for proper determination during adjudication.

4. The applicability of penalties for non-filing of returns and delayed payment of tax was extensively debated. The original authority's findings on the filing of returns belatedly and payment of tax were central to the arguments. The Tribunal emphasized the importance of proper notice issuance and determination of payable amounts, ultimately setting aside penalties under Sections 76 & 78 but upholding a penalty of &8377; 3000 under Section 77 for non-submission of returns.

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