2006 (7) TMI 15

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..... October, 1998. The appellants promptly took registration, made periodic payments of tax and filed returns. For example, the first return was filed by appellant M/s. Panther Security Service in April, 1999. On 11-8-99, revenue issued show cause notice alleging that the service tax was required to be paid on the gross amount received and not on the service charge component alone. Differential duty demand was, accordingly, made. Despite the notice, the appellant continued to value service at the value of service charge. Consequentially under-payment also continued. The impugned orders demand the tax so short-paid from October, 1998 to September, 1999 and impose penalties. 4. The appellants challenged the short-levy demand as well as penalty .....

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..... encies retained only the "service charge at 15%" and therefore, valuation of the service should be at that value, lie has also relied on the Trade Notice dated 13-10-98 of the Kanpur Commissionerate. 5. Learned SDR points out that there is no basis for the contention that only "service charge" is to be taken into account for the purpose of valuation of the service. He would contend that the definition of value of taxable service makes it clear that "gross amount charged" is the basis. We may read that definition "Gross amount charged by such agency from the client for services rendered in connection with the security in any property or person and includes services of investigation, detection of verification of any fact or activity inclu .....

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..... nd such errors are excluded under Section 80 from penalty. We may read that Section: "Notwithstanding anything contained the provision of Sections 76 and 77, Section 78 and Section 79, no penalty shall be imposable on the assessee for any failure referred to in the said provision if the assessee proves that there was no reasonable cause for the said failure". 9. The Section attracted in the present case is Section 76, inasmuch as there was short payment of tax. Short payment of tax has resulted wrong valuation of service. Submission of the learned Counsel is that appellant was under bona fide belief that the value of service rendered was 'service charge' only and that the wages of the guard and supervisor were not includible. We have di .....

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