9911796707
TMI Blog2014 (9) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... them. Enquiry in the matter was initiated by DC (Audit) CE Ahmedabad III. On further enquiry, necessary information was sought from the Respondent vide letter dated 12.11.2008 by CE Ludhiana and statement of the Respondent was recorded on 24.11.08. Respondent paid impugned Service Tax amounting to Rs. 652207/- on 15.11.08. Show Cause Notice dated 24.6.2009 was issued for appropriation of the Service Tax amount and for recovery of interest and imposition of penalty under section 76 and 78 of the Finance Act, 1994. Case was originally adjudicated by the Additional Commissioner vide order dated 29.6.10. Impugned Service Tax amount was confirmed and appropriated. Interest was ordered to be recovered under section 75 and penalties were also imposed upon the Respondent under both section 76 and 78 of the Finance Act, 1994. On appeal by respondents, the Commissioner (Appeals) upheld order for recovery of service tax and interest but dropped the imposition of penalties under sections 76 and 78 of the Act ibid. On the ground that of legal consultancy became taxable only on 7.7.2009 however period of rendering service was prior taxability. 3. Ld DR elaborated that Service Tax in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. (5) The amount paid to the credit of the Central Government under sub-section (1) or sub-section (2) or sub-section (4), shall be adjusted against the service tax paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded, by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall not be less than, but which shall not exceed twice, the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded. 5. The amount of Service Tax has been collected by the Respondent from his customers vide the three invoices, though service tax was not chargeable on relevant service. However once service tax was collected from the service receiver, it was required to be deposited to the Government exchequer in terms of section 73A(2). I find that the Respondent had collected the said amount as Service Tax vide three invoices dated 29.3.08 and had deposited the Service Tax with the Revenue, after investigations were initiated against him, on 15.11.2008. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice Tax Rules, 1994 framed under section 94 of the Act regarding collection and payment of the Service Tax are also applicable in the matter as these rules also framed under the same Chapter V of the Finance Act, 1994. 8. In view of above, I find no merits in the Commissioner (Appeals)s finding on the matter of penalty and hold that penalties under section 76 and 78 of the Act are imposable for non- payment / short payment of Service Tax recoverable under section 73A of the Act based on interpretation of law. However whether both penalties are imposable simultaneously is being discussed in succeeding para. 9. To determine whether or not both the penalties under sections 76 and 78 are imposable simultaneously, it is necessary to look into the period involved in the matter under consideration. The period involved in the matter is March 2008. It is noted that Section 78 was amended w.e.f. 10.5.2008 to the effect that 'if penalty is payable under this section, the provisions of section 76 shall not apply'. Therefore, after 10.5.08 only, one of these penalties can be imposed at a time. For the period prior to this amendment, it is noted that the matter was rather debatable and diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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