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2015 (11) TMI 523 - AT - Service TaxBusiness auxiliary services - service tax on the commission received from banks and insurance company - Penalty u/s 77 & 78 - Held that:- As regard services of motor vehicle, appellant have been collecting service tax alongwith service charges and was not paying to the Government exchequer. When appellant was collecting service tax, they were well aware of the taxability of the service and for that reason only they were collecting service tax and retaining with them. I am of the view that appellant has not made out any reasonable cause for waiver of penalty imposed under Section 78 in respect of service tax demand on the services of motor vehicle. However appellant have complied with the option provided by the adjudicating authority, paid the service tax alongwith interest prior to issuance of show cause notice and 25% of penalty within one month from the date of adjudication order, therefore the penalty stand reduced to 25% of the service tax amount of ₹ 10,67,854 - Therefore taxability of the said services was not free from doubt, therefore the appellant in respect of these two services shown reasonable cause for waiver of penalty imposed under Section 77 and 78. Penalty of 25% of the service tax amount of ₹ 10,67,854/- and drop penalty imposed under Section 78 in respect of service tax paid on commission from bank/insurance company and handling charges of RTO. Penalty imposed under Section 77 for ₹ 10,000/- shall stand reduced to ₹ 5,000 - Decided partly in favor of assessee.
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