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2014 (4) TMI 324 - CESTAT MUMBAIDuty demand - Business Auxiliary Service - Collection of Passenger service Fees - Penalty u/s 76, 77 & 78 - Held that:- From statutory definition, it is clear that if a person collects payment for the services rendered by another person and remit the same, then the activity would come under the purview of Business Auxiliary Service as defined in Section 65(19) (vii) and the activity would be leviable to Service tax. Collection of charges for the service rendered is more specifically covered under ‘Business Auxiliary Service' and not under ‘Business Support Service'. As per the Section 65A of the Finance Act, 1994, which deals with the classification of taxable services, sub-clause (105) of Section 65 which provides the most specific description shall be preferred to sub-clauses providing more general description. In the case before us Section 65(19) read with sub-clause (zzb) to Section 65(105) provides the most specific description. Thus the activity undertaken by the appellant is specifically covered under ‘Business Auxiliary Service' and not under ‘Business Support Service'. Extended period of limitation - Held that:- Appellant did not declare the activity to the Revenue authorities during the relevant period and filed the returns only in October 2006. Only from the returns filed in October 2006, the Revenue came to know about the activity under taken by the appellant. The show-cause notice was issued in June 2007, well within the normal period of one year, from the date of filing returns and, therefore, the demand for the period with effect from 16.6.2005 is clearly sustainable in law. Penalty - As regards the penalty imposed under Sections 76 and 77, as pointed out by the learned A.R. appearing for the Revenue, no mens rea is required to be proved and mere contravention of law would suffice. Therefore the penalties imposed under these sections are sustainable, subject to re-quantification of the amount of the service tax liability from the period w.e.f. 16.06.2005. As regards the penalty imposed under Section 78, it is settled position in law that the said penalty is imposable if any of the elements specified in the said Section i.e. fraud, collusion, suppression, willful mis-statement or contravention of any of the provisions of the law with an intent to evade payment of duty are present. In the present case, the appellant did not declare to the department the activities undertaken by them prior to 01.07.2006. Thus the service tax liability of the appellant has to be quantified for the period w.e.f 16.6.2005 and on such recomputed liability, the interest and penal liabilities would accrue - Decided partly in favour of assessee.
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