TMI Blog2014 (10) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... is no finding in the given case as to how the original authority has imposed penalty under Section 78 of the Act. The Original Authority should have applied his mind as to how penalty is leviable under Section 78 of the Act and there should have been some reasons given thereunder, which we find are absent in the original order. order of the Tribunal confirming the deletion of penalty imposed under Section 78 of the Finance Act, 1994 is justified and warrants no interference. Assessee has stated that they were under the impression that the service rendered by them will not be exigible to service tax. On an earlier occasion, the assessee registered and paid service tax on a non taxable service and they did not even seek for refund of the amount. The bona fide confusion in the mind of the assessee as to which service is taxable or non-taxable is apparent and that justifies the plea of failure to pay service tax. This reasoning pari passu applies to non registration of said service rendered by them. Therefore, the demand of penalty under Sections 76 and Section 77 of the Finance Act, 1994 is not tenable - Decided against Revenue. - C.M.A.Nos. 2444 of 2007 and 1112 of 2009 C.M.A.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them only after receipt of intimation from the Department and they immediately cooperated with the department by getting themselves registered and paying certain amount towards service tax and interest. In fact, before the adjudication, the entire amount of tax and interest was paid. However, the adjudicating authority passed the following order: I have gone through the records of the case, the written and oral submissions made by the assessee. The notice alleges that M/s.Busybee has rendered that service under the category of Business Auxiliary Service without registration and have failed to pay service tax for the gross amount received by them for the service rendered by them for the back office support to M/s.BPL and ICICI Banks. In this case I find that the assessee has admitted the tax liability and in fact have paid the service tax of ₹ 4,03,065 and ₹ 6637 totalling ₹ 4,09,702/- in five instalments as per details below: Date of TR6 challan Service Tax Rs. Cess Rs. 26.11.2005 80000 6637 26.12.2005 90000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voke the penal provisions of this section, any one of the following should be present: a) Fraud or b) Collusion or c) Willful mis-statement or d) Suppression of facts or e) Contravention of any provisions of this chapter or of the rules made there under with intent to evade payment of service tax. 4.5. The appellants' main activity being what it was, they were ignorant of the fact that service tax was payable by them on the back office support services rendered by them. The lower authority has failed to prove with the available facts and evidences that there was a malafide intention on part of the appellants to evade the payment of service tax. It is not out of place to state here that the appellants had in fact come forward to register the impugned services and in fact paid a part of the amount along with interest disputing to the fact that the service tax was payable only on the commission received for the services rendered. Subsequently on being issued with a demand notice, the appellants have duly paid the balance of service tax along with interest in instalments, well before the completion of adjudication proceedings. The lower authority imposed penalty t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 78 of the Finance Act, 1994, followed the above decision rendered by it on 29.1.2007 in the assessee's appeal and dismissed the appeal of the Department holding that there is no case to restore the penalty imposed by the original authority. 2.8. Aggrieved by the said orders, the Department has filed these appeals on the following substantial questions of law C.M.A.No.2444 of 2007: (i)Is the Tribunal's decision to allow the service provider's appeal against the impugned Order-in-Appeal without considering the grounds in the cross appeal filed by the Department against the same Order-in-Appeal correct in view of the Larger Bench decision of the Tribunal in the case of CCE v. Standard Tarpaulin Industries, 2002 (143) ELT 430? (ii)Is the Tribunal's decision to waive the penalties imposed under Sections 76, 77 and 78 of the Finance Act, 1994 correct in view of the judgment pronounced in the case of CCE v. Machino Montell (I) Ltd., 2006 (202) ELT 3968 (P H) and CCE v. Padmashri V.V. Patil Sahakari Sakhar Karkahana Ltd., 2007-TIOL-419-HC-MUM-CX? C.M.A.No.1112 of 2009: (i)Whether the Tribunal has any discretion to impose penalty, which is less th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before adjudication. This only goes to show that the assessee had no intention to evade payment of tax and non payment was due to lack of knowledge and awareness. 6.3. That apart, one another factor which enures to the benefit of the assessee is that there is no finding in the given case as to how the original authority has imposed penalty under Section 78 of the Act. The Original Authority should have applied his mind as to how penalty is leviable under Section 78 of the Act and there should have been some reasons given thereunder, which we find are absent in the original order. 6.4. In such view of the matter, the order of the Tribunal confirming the deletion of penalty imposed under Section 78 of the Finance Act, 1994 is justified and warrants no interference. 7.1. Apropos of the levy of penalty under Sections 76 and 77 of the Finance Act, 1994, it would be relevant to refer to Section 80 of the Act, which reads as under: 80. Notwithstanding anything contained in the provisions of Section 76, Section 77, Section 78 or Section 79 , no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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