2022 (11) TMI 438 - AT - Service Tax

Levy of Penalty u/s 76, 77 and 78 of FA - Sale of Space and Time for Advertisement - appellant were neither registered with service tax department nor they were paying service tax and were also not filing service tax returns - HELD THAT - The appellant have not disputed the tax liability along with applicable interest. In this position, the issue to be decided before us is only penalties imposed under Section 76, 77 and 78. Penalty under Section 76 of FA - HELD THAT - The simultaneous penalty is not imposable as settled by the Hon ble Gujarat High Court in the case of M/S RAVAL TRADING COMPANY VERSUS COMMISSIONER OF SERVICE TAX 2016 (2) TMI 172 - GUJARAT HIGH COURT , therefore, the penalty imposed under Section 76 is not sustainable. Hence, the same is set aside. Penalty under Section 77 and 78 of FA - HELD THAT - The entire case was made out on the search conducted by the departmental officer in the premises of the appellant, the appellant have never disclosed their activity before the department, therefore, they suppressed the fact from the department accordingly, the penalty under section 77 and 78 were rightly imposed. Therefore, the penalty imposed under Section 77 and 78 is upheld. Appeal allowed in part.

Summary

Issues:
- Liability to pay service tax for 'Sale of Space and Time for Advertisement'
- Imposition of penalties under Section 76, 77, and 78

Analysis:

Liability to pay service tax for 'Sale of Space and Time for Advertisement':
The case involved the appellant providing taxable services of 'Sale of Space and Time for Advertisement' without being registered with the service tax department or paying service tax. A search conducted at the appellant's premises confirmed the provision of these services. The show cause notice resulted in the confirmation of service tax liability of Rs. 1,40,190 along with interest and penalties under Section 76, 77, and 78. The Commissioner (Appeals) upheld the order-in-original, noting that the appellant accepted the liability and did not contest the taxability of the services. The Tribunal concurred with this finding, emphasizing that the appellant did not dispute the tax liability or interest. Therefore, the issue before the Tribunal was limited to the penalties imposed under Sections 76, 77, and 78.

Imposition of penalties under Section 76, 77, and 78:
Regarding the penalty under Section 76, the Tribunal referred to a precedent set by the Hon'ble Gujarat High Court, ruling that simultaneous penalties are not sustainable. Consequently, the penalty under Section 76 was set aside. However, concerning the penalties under Sections 77 and 78, the Tribunal noted that the appellant had never disclosed their activities to the department and had suppressed facts during the search, justifying the imposition of penalties under these sections. Therefore, the Tribunal upheld the penalties under Sections 77 and 78 while partly allowing the appeal by setting aside the penalty under Section 76. The judgment was pronounced on 03.11.2022, emphasizing the final decision on the penalties imposed.

This detailed analysis of the judgment highlights the issues of liability for service tax and the imposition of penalties under different sections, providing a comprehensive understanding of the Tribunal's decision in the case.