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TMI Blog2014 (9) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... 78 is applicable for non payment / short payment of service tax for any ‘contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax’. The Chapter mentioned in these provisions is Chapter V of the Finance Act, 1994 which also contains Section 73A. Further Service 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. Regarding simultaneous penalty - Held that:- 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 different High Courts have interpreted the issue differently. - Respondent is situated in Punjab and therefore judgement pronounced by Punjab and Haryana High Court which is jurisdictional High Court, has to be fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 was payable in terms of Section 73A(2) of the Act as the Service Tax amounts had already been recovered by the Respondent from their customers and not deposited with the department. However such taxes were paid to the Department only after enquiry in the matter initiated by the Department. Interest leviable was also not paid. In such a situation, Show Cause Notice for recovery of Service Tax, interest and imposition of penalty was warranted in terms of Section 73(4) of the Act ibid. He submitted that penalties under sections 76 and 78 of the Act were imposable as this was an act of deliberate evasion of Service Tax when Service Tax as tax has been collected but not paid to the Department. Findings of the Commissioner (Appeals) that penalties under these provisions could not be imposed were also contested. On being asked whether both penalties could be imposed simultaneously, he referred that the period for the offence was March 2008 while section 78 was amended on 10.5.2008 to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1). (6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount. Section 68. Payment of service tax. Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be prescribed. (2) Notwithstanding anything contained in sub-section (1), in respect of any taxable service notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice and closure of the case could not be extended to them as interest alongwith service tax was not deposited. Thus there is no waiver of penalty available to appellants. 6. As regards imposition of penalties, I find that the charging of Service Tax by the Respondent and retaining the same with him instead of paying the same to the Revenue is an act of wilfull suppression of facts with intent to evade Service Tax and establishes Respondent s malafide. It was only on insistence of the Revenue that dues were paid. Therefore all the elements essential for imposition of penalty under sections 76 and 78 are there. The Commissioner (Appeals) set aside these penalties on the reasoning that penalties under these sections could be imposed only when the Service Tax was not paid / short paid be Service Tax actually payable in terms of section 68 of the Act. He also held that the service rendered by the Respondent was that of legal consultancy which was not taxable during the relevant period. I find that ground taken by Commissioner (Appeals) is not sound and legal. Section 68 makes persons providing taxable services to pay Service Tax at the rates specified under section 66. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that these penalties were imposable simultaneously [case laws - Assistant Commissioner of Central Excise vs. Krishna Poduval - 2006(1) STR 185 (Kerala); Bajaj Travels Ltd. vs. Commissioner of Service Tax 2012(25) STR 417 (Delhi) - refer], on the other side the Punjab and Haryana High Court differed and ordered that penalties could not be imposed simultaneously (case law - Commissioner of Central Excise vs. First Flight Courier Ltd.- 2011(22) STR622(P H) - refers). The Principal Bench of this Tribunal has also relied upon the Punjab and Haryana High court to decide such an issue pertaining to a assessee situated in Jalandhar (case law - CCE Chandigarh vs. Punjab State Federation Co-Operative Sugar Mills ltd - Final Order No. 52161/2014 dated 15.05.2014- refers). In the instant case, I find that the Respondent is situated in Punjab and therefore judgement pronounced by Punjab and Haryana High Court which is jurisdictional High Court, has to be followed. Accordingly I hold that both these penalties are not imposable simultaneously even prior to amendment on 10.5.2008 in the jurisdiction of Punjab Haryana High Court. 10. The ld. DR pleads for imposition of penalty under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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