9911796707
TMI Blog2008 (5) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 "Security Agency" service - a taxable service within the meaning of Section 65(105)(w) of the Finance Act, 1994. In course of scrutiny of records of M/s B.S.N.L., Gorakhpur, it transpired that the appellant was providing the Security Agency Service to them from April 2000 to December 2003, and received a sum of Rs. 1,30,75,260/- for the period April 2000 to April 2003, and Rs. 36,00,455/- for the period May 2003 to December 2003 as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 Sections 76, 77 and 78 of the Finance Act. Section 76 provides for penalty where a person liable to pay Service Tax fails to pay the tax. Section 77 provides for penalty for violation of any of the provisions of Chapter V of the Finance Act, 1994 or any Rule made thereunder for which no penalty is separately provided in the Chapter. Section 78 provides for penalty in cases of non-levy/non-payment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 sums of Rs. 2,31,300/- payable on delayed payment of the Service Tax amounting to Rs. 5,18,610/- for the period April 2000 to June 2002 and Rs. 4,23,189/- being equivalent to the amount of tax payable for the period June 2002 to December, 2003. The payment made by M/s B.S.N.L. pursuant to the direction of the Allahabad High Court pertains to the later period i.e June 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 itself, it escaped the liability for a substantial period as no action was taken within time, as even by applying the extended period of limitation, the appellant could not be fastened with the tax liability for the period prior to 2000. 8. Imposition of penalty under Sections 77 and 78 is different from the one under Section 76. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 be read as substantive provision, it can be used as a guide to cull out the real meaning of the provision. The language of the heading, prima facie, suggests that penalty can be imposed where the person has suppressed any fact pertaining to the value of taxable service. Non-submission of the return per se, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be sufficient to discharge the penal obligations under Section 76 of the Act. 13. In the result, the order of the Assistant Commissioner as modified by the Commissioner (Appeals), is further modified in the following manner : (i) appellant is held liable to pay penalty of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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