2023 (5) TMI 81 - AT - Service Tax

Levy of Penalty - Business Auxiliary Service - empanelment fees recovered from the empanelled venders as commission shown under the head rebate - issue of liability of the appellant stands already decided as against the appellant and that the appellant has already deposited the amount of demand alongwith the amount of interest - HELD THAT - It is a fit case of waiver of penalties proposed under Section 76, 77 78 of the Act ibid, in terms of Section 80 of the Finance Act. 1994 and even after non existence of the Section 80, it is found that being a Government defence organisation no malafide intention can be attributed to the omissions which have occurred on the part of the noticee. The Hon ble Tribunal in similar circumstances has waived the penalties in terms of Section 80 of the Act ibid. - reliance can be placed in the case of NAGAR NIGAM, KOTA VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I 2009 (12) TMI 457 - CESTAT, NEW DELHI , COMMISSIONER OF CENTRAL EXCISE, JALANDHAR VERSUS M/S GENERAL MANAGER, TELECOM 2012 (8) TMI 499 - CESTAT, NEW DELHI and ANDHRA PRADESH TOURISM DEVELOPMENT CORPN. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD 2012 (5) TMI 346 - CESTAT, BANGALORE . There are no reason to differ from the said findings specifically when in the present appeal also the appellant has deposited the entire amount of demand confirmed and the amount of interest imposed - the order of Commissioner (Appeals) is modified by setting aside the order of imposing penalty upon the appellant. Appeal allowed in part.

Summary

Issues involved:
The issues involved in the judgment are the confirmation of Service Tax liability, imposition of penalty under section 77 of the Finance Act, and the appeal against the Order-in-Appeal.

Service Tax Liability:
The appellant was alleged to be liable to pay service tax under the category of "Business Auxiliary Service" on empanelment fees recovered from empanelled vendors as commission shown under the head "rebate" during the year 2014-15. The Order-in-Original confirmed the proposal to recover the mentioned amounts along with interest and penalties, which was later rejected in appeal leading to the appellant approaching the Tribunal.

Imposition of Penalty:
The primary contention of the appellant was against the imposition of penalties. The appellant had already deposited the demanded amount along with interest. The appellant argued that no penalty should be imposed, citing a previous Tribunal order that set aside the penalty due to the absence of mens rea on the appellant's part. The appellant sought modification of the Order-in-Appeal to remove the penalty.

Tribunal's Decision:
After hearing both parties and considering the record, the Tribunal observed that the main issue was the penalty imposed on the appellant. The Tribunal noted that several similar Show Cause Notices were issued against the appellant for previous periods, all of which were decided in favor of the appellant by the Tribunal. The Tribunal referred to the previous order where penalties were waived due to the absence of malafide intention and reasonable cause for non-payment of tax. Based on these findings and the appellant's compliance in depositing the demanded amount and interest, the Tribunal set aside the penalty imposed on the appellant, partially allowing the appeal.