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TMI Blog2023 (2) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... ax liability. The facts in the instant case are similar. Relying on the aforesaid decision of Hon ble High Court, while demand of service tax and interest is upheld, the penalties imposed under Section 76, 77 and 78 are set aside invoking Section 80 of the Finance Act, 1994. Appeal allowed in part. - Service Tax Appeal No. 24 of 2012 - Final Order No. A/10324/2023 - Dated:- 27-2-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Ishan Bhatt (Advocate) for the Appellant Shri Dinesh M. Prithiani, Assistant Commissioner (Authorized Representative) for the Respondent ORDER This appeal has been filed by M/s Psl Limited against demand of service tax, interest and imposition of penalty und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they had a bonafide belief that activity of coating of pipelines do not qualify as Business Auxiliary Service as neither the said activity amounted to production of goods nor it was conducted on behalf of client . It was argued that there was no suppression and none of the ingredient on Section 73 of the Finance Act, 1994 are present to invoke extended period of limitation. iv. Learned counsel further sought invocation of provisions of Section 80 of the Finance Act, 1994, to set aside the penalties imposed under Section 76, 77 and 78 of the Finance Act, 1994 as the issue involved relates to interpretation of statute. 3. Learned Authorized Representative relies on the decision of the Commissioner (Appeals). He also relied on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d benefits to the respondent. 7. In this regard it may be pertinent to note that the Commissioner in paragraph 34 of his order has observed thus : M/s. PSL have further contended that if the activity undertaken by them is held to be taxable, they would be entitled to Cenvat credit of duty paid- -on-coating material, etc. used in epoxy coating and to avail credit on all input services, however, they have not produced any details or any documents in support of this claim. Therefore, the said benefit cannot be granted to them at this stage. However, M/s. PSL shall produce all documentary evidence in support of his claim before the Jurisdictional Deputy/Assistant Commissioner who shall allow such benefit in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntification of the demand by extending the above benefits to the respondent. It may also be noted that though a question has been proposed as to whether the Tribunal was justified in remanding the matter to the original jurisdiction authority for re-quantification of the demand, no ground is taken up in the appeal memo in relation to the said question. All the grounds pertain only to the second question. In the prayer clause also the appellant has challenged the order of the Tribunal only to the extent of the penalty on the respondent. 9 . Insofar as imposition of penalties is concerned, the Tribunal was of the view that the revenue was aware of the activity of epoxy coating being carried out by the respondent, inasmuch as litigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re taxable as Business auxiliary services , the revenue never advised the respondent to start paying tax on the said activity. That considering the fact that the revenue was aware of the respondent s activities, it cannot be said that there was any suppression, misstatement or intent on the part of the respondent to evade service tax. Besides, the facts of the case indicate that there was a bona fide litigation going on as regards the nature of the activity carried on by the respondent. As to whether the activity carried on the by respondent would amount to production so as to be covered under the category of Business Auxiliary Services was a debatable issue. In the circumstances, it cannot be said that the assessee has not proved that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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