TMI Blog“Imposition of penalty under Section 77 and 78 of the Finance Act, 1994 when penalty under Section 76 thereof was waived off”X X X X Extracts X X X X X X X X Extracts X X X X ..... “Imposition of penalty under Section 77 and 78 of the Finance Act, 1994 when penalty under Section 76 thereof was waived off” - By: - Bimal jain - Service Tax - Dated:- 19-1-2015 - - Dear Professional Colleague, Imposition of penalty under Section 77 and 78 of the Finance Act, 1994 when penalty under Section 76 thereof was waived off We are sharing with you an important judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Hon ble CESTAT, Mumbai, in the case of Garodia Special Steels Ltd Vs. Commissioner of Central Excise, Raigad [ 2015 (1) TMI 385 - CESTAT MUMBAI ] on following issue: Issue: Whether the imposition of penalty under Section 77 and 78 of the Finance Act, 1994 is justified, when penalty under Section 76 was waived on the ground of reasonable cause? Facts and back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground: In the instant case, Garodia Special Steels Ltd. ( the Appellant ) paid Service tax under the category of Goods Transport Agency on reverse charge basis. However, during the audit of their unit, the reconciliation of ledger accounts with the Service Returns revealed that the Appellant had not paid the due Service tax during the periods 2007-2008 and April 2008 to December 2009. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant paid the entire amount of Service tax before the issuance of Show Cause Notice. Nonetheless proceedings were initiated and apart from upholding the Service tax demand, penalties were imposed under Section 77 and 78 of the Finance Act, 1994 along with interest. On appeal being filed to the Commissioner (Appeals) against imposition of penalty, the same was rejected. Being aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved, the Appellant filed an appeal before the Hon ble CESTAT, Mumbai. Held: The Hon ble CESTAT, Mumbai while setting aside the penalties imposed under Section 77 and 78 of the Finance Act held as under: Detection of non-payment of Service tax from the books of accounts maintained by the Appellant, indicates that the Appellant could not have any mala fide intention to evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of Service tax; The Adjudicating Authority waived penalty under Section 76 of the Finance Act by taking cover of Section 80 thereof. Having found reasonable cause for waiving penalty under Section 76 of the Finance Act , there is no justification for imposing penalty under Section 77 and Section 78 thereof. Therefore it was found that there were substantial grounds f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or taking lenient view as it indicates that Appellate could not have any mala fide intention to evade payment of Service tax and even Adjudicating Authority waived the penalty under Section 76 by taking cover Section 80 of the Finance Act as tax had been paid prior to issue of show cause notice and that the unit is registered under BIFR. Hope the information will assist you in your Profe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - I, Delhi 110091, India Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. No. 908, Sector 12-A, Panchku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la, Haryana 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata 700 004 Email: bimaljain@hotmail.com Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt should be distributed or copied (except for personal, non-commercial use) without our written permission. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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