2018 (3) TMI 857 - AT - Service Tax

Penalty u/s 76 and 77 - Held that - As the learned Commissioner (Appeals) remanded the matter back for quantification to the Adjudicating Authority, therefore, we keep open the issue of imposition of penalty under Section 76 of the Finance Act, 1994 before the Adjudicating Authority - appeal of Revenue disposed off.

Summary

Issues:
1. Service tax liability determination based on a specific notification and a Supreme Court judgment
2. Setting aside of penalty under Section 76 of the Act
3. Retention of penalties under Sections 75A and 77

Analysis:

1. The judgment addresses the appeal by the Revenue against an order of the learned Commissioner (Appeals) concerning service tax liability. The Commissioner directed the adjudicating authority to determine the appellant's service tax liability by considering a specific notification (no. 15/2007 dated 04/04/2007) issued under section 11C of the C.Ex Act 1944, as well as a judgment of the Hon'ble Supreme Court (CCE v. Maruti Udyod Ltd. 2002 (141) ELT 3 (SC)). The Tribunal noted that the matter was remanded back to the Adjudicating Authority for quantification, keeping open the issue of imposition of penalty under Section 76 of the Finance Act, 1994. The judgment upholds the impugned order and modifies it accordingly.

2. The penalty of ?5,00,000 imposed under Section 76 of the Act was set aside by the learned Commissioner (Appeals). However, penalties under Sections 75A (?500) and 77 (?1000) were retained. The Tribunal acknowledged the Revenue's dispute regarding the penalty dropped under Section 76 of the Act. Despite the remand for quantification of service tax liability, the issue of penalty under Section 76 was to be addressed by the Adjudicating Authority as per the Tribunal's decision.

3. In conclusion, the Tribunal disposed of the Revenue's appeal by maintaining the impugned order with modifications. The judgment emphasizes the separate treatment of the service tax liability determination and the penalties imposed under various sections of the Act. The decision ensures that the issue of penalty under Section 76 is left open for consideration by the Adjudicating Authority, while penalties under Sections 75A and 77 are upheld.