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2014 (12) TMI 457 - AT - Service TaxOption to levy Simultaneous Penalty u/s 76, 77 & 78 - Power of adjudicating authority - Intention to suppression of facts - Held that:- During the relevant period penalty under Sections 76 and 78 of Finance Act, 1994 were not mutually exclusive and therefore the Commissioner (Appeals ) is not correct in holding that the two penalties (under Sections 76 & Section 78) could not be imposed simultaneously. However it is seen that the Punjab and Haryana High Court in the case CCE Vs. First Flight courier 2[2011 (1) TMI 52 - High Court of Punjab and Haryana] has observed that penalty under Section 76 may not be justified if penalty had already been imposed under Section 78. Even if it is not correct to say that penalty under Section 76 can never be imposed after penalty under Section 78 is imposed, the appellate authority was within its jurisdiction not levy penalty under Section 76 having regard to the fact that penalty equal to service tax has already been imposed under Section 78 of the Finance Act 1994. Following decision of CCE Vs. Pannu Property Dealers, Ludhiana [2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT]. - Decided in favour of assessee. It is not enough to merely claim that they had bona fide belief that their services were not liable to service tax. It is to be demonstrated that they had taken reasonable steps to ascertain about the taxability of their services which evidently in this case they had not taken. Bona fide belief is an informed belief and the appellants have not been able to show as to on what basis they could harbour the belief that the impugned services were not taxable when they were providing such services on such a large scale. Seen in this light non-payment of service tax for such a long period clearly leads to a sustainable conclusion that it was an act which was wilfull for evading service tax. Therefore penalty under Section 78 ibid is clearly imposable. There is however force in the contention of the appellants that neither the original adjudicating authority nor the appellate authority gave than an option to pay (reduced) penalty of 25% of the Service Tax in terms of the proviso under Section 78. Following decision of CCE, Chennai vs. Zen Systems and Maintenance Pvt. Ltd. 2013 (7) TMI 603-CESTAT (Chennai) appellants deserve to be given the benefit to pay 25% of the penalty under Section 78 ibid within a month of the receipt of this order. - Decided partly in favour of assessee.
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