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2016 (10) TMI 914 - AT - Service TaxCable operator services - extended period of limitation - whether appellant is also liable to tax for the gross amount received from subscriber and paid to MSO apart from commission received? - Held that - the appellant was admittedly only showing the commission amount as the value of services, which was being duly reflected by him in the returns so filed with the Revenue. No objection was ever raised by the Revenue. Infact, we find that the adoption of reflecting commission only in the ST-3 returns was a pattern adopted by most of cable operator service providers. In the absence of any positive evidence to reflect malafide on the part of assessee, we are of the view that imposition of penalty may not be justifiable - appeal allowed - decided in favor of appellant.
Issues: Penalty imposed under sections 76, 77, and 78 of the Finance Act, 1994 on a cable operator for service tax liability.
In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue revolved around the penalty imposed on a cable operator under sections 76, 77, and 78 of the Finance Act, 1994. The appellant, a cable operator registered with the Revenue, discharged service tax liability only on the commission received, not including the gross amount from subscribers paid to the MSO. A demand of &8377;2,48,275/- was confirmed against the appellant, along with interest. The appellant had been granted Cenvat Credit for service tax paid on services received from the MSO. The lower authorities upheld the penalty, citing suppression by the assessee. Upon review, the Tribunal noted that the appellant had consistently declared only the commission amount as the value of services in returns filed with the Revenue, with no objections raised by the Revenue previously. This practice was common among cable operator service providers. In the absence of evidence indicating malafide intent on the part of the assessee, the Tribunal deemed the penalty imposition unjustifiable. Consequently, the Tribunal set aside the penalty and allowed the appeal. In conclusion, the Tribunal allowed the appeal, emphasizing the lack of evidence to support the imposition of the penalty on the cable operator for service tax liability under sections 76, 77, and 78 of the Finance Act, 1994.
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