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TMI Blog2008 (5) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Adv. for the Appellants. B.S. Suhag, DR for the Respondent [Order per S.N. Jha, President]- 1. This appeal by the assessee is directed against the order of the Commissioner (Appeals) dated 06.12.2006 by which, modifying the order-in-original of the Assistant Commissioner of Central Excise dated 17.02.1006, he imposed penalty of Rs. 6,54,489/- (Rs. 2,31,300 + 4,23,189) under Section 76 and Rs. 4,23,189/- under Section 78 of the Finance Act, 1994. However, penalty of Rs. 1,000/- under Section 77 was upheld. The Commissioner also directed that interest at the applicable rate may be recovered under Section 75 of the Act, after deducting the interest already paid. 2. The appellant is engaged in the business of providing Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he obligation to pay Service Tax on the service provided by it and, therefore, failure to pay the tax deserves to be condoned under Section 80 of the Act. It was submitted that for failure of M/s B.S.N.L. to pay the dues for the services rendered to it, the appellant filed a Writ Petition in the Allahabad High Court and pursuant to order of the High Court, a sum of Rs. 4,23,189/- was paid by M/s B.S.N.L. directly to the Assistant Commissioner. It was also submitted that after getting registration from the Department, the appellant paid the Service Tax along with interest on the delayed payment and, therefore, there was no justification for imposing penalties. 4. As mentioned above, penalties have been imposed separately under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 67(I) of the Finance Act which lays down the value of taxable service (in case service is for monetary consideration) as gross amount charged by the service provider . There is no dispute that in terms of under Section 68(I), the appellant being service provider was liable to pay Service Tax. In this view of the matter, the fact that M/s B.S.N.L. did not pay the amount and the appellant had to file Writ Petition in the Allahabad High Court and pursuant to the order of the High Court payment was made by M/s B.S.N.L. direct to the Assistant Commissioner, is not enough to justify waiver of penalty. 5. At this stage it may be mentioned that sum of Rs. 6,54,489/- payable under Section 76 in terms of the impugned order comprises of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dverting to this aspect, I may mention that in terms of Section 76, penalty is imposable in addition to such tax and the interest on that tax and, therefore, the submission of the learned consultant that having paid the interest on the amount of tax, in cases of delayed payment, penalty cannot be imposed, must be rejected out of hand. 7. Now coming to the question as to whether the benefit of Section 80 can be extended to the appellant, it may be mentioned that the Security Agency service is a notified taxable service since 16.10.1998 itself and it is idle for the appellant to contend that it was not aware of its Service Tax obligations. Though the appellant was liable to pay tax on the service provided by it since 16.10.1998 itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esult and concomitant of non-registration for which penalty has already been imposed under Section 77 of the Act. The clause suppression of facts can be applied where return is filed or some statement or declaration (which the person is required to submit) concealing material facts having bearing on the tax liability of the person. In that situation, it can be said that he has suppressed facts resulting in the non-levy/non-payment or short levy/short payment or erroneous refund. I am inclined to think that merely because the appellant did not submit return, he cannot be penalized under Section 78. It may be kept in mind that Section 78 refers to penalty for suppressing value of taxable service . Though the heading of the Section cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80, where the person/assessee succeeds in proving reasonable cause for failure to pay tax, penalty may be waived altogether. 11. In the facts and circumstances, the belief of the appellant that it was liable to pay Service Tax only on receipt of the amount from the recipient which is M/s B.S.N.L., could be a bonafide belief. It may be recalled that the appellant had filed Writ Petition seeking direction from the Allahabad High Court to pay the dues and pursuant to the orders of the High Court, the dues were paid by B.S.N.L. directly to the Assistant Commissioner of Central Excise. 12. In the facts and circumstances, I am of the view that penalty of Rs. 50,000/- each for the periods in question totalling Rs. 1 lac in all would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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