2008 (2) TMI 370 - AT - Service Tax

Architectural design services enhancement of penalty by commissioner in revision order - Tribunal s decision in the case of Prakash Eknath Bhoge wherein in respect of the architect services enhancement of penalty in revision was set aside is applicable to present case - impugned order is set aside and restored to the order of the original Adjudicating Authority

Summary

Issues:
1. Penalty imposition under Sections 75A and 76 of Finance Act, 1994 by original Adjudicating Authority.
2. Commissioner's enhancement of penalty under Section 76.
3. Applicability of High Court and Tribunal decisions on penalty revision.

Analysis:
1. The appellant did not dispute the duty or interest demand but challenged the penalty imposition by the original Adjudicating Authority under Sections 75A and 76 of the Finance Act, 1994. The appellant's representative argued that the Commissioner's revision to enhance the penalty under Section 76 to the service tax amount was not valid. Citing a High Court decision and a Tribunal ruling, the representative contended that such revisions on the original authority's discretion have been deemed unlawful in previous cases.

2. The appellant claimed to have been under a genuine belief, due to a pending Writ Petition before the High Court, that service tax was not applicable to the services provided. Additionally, the appellant referenced a Tax Payer Friendly Scheme by the Government where no penalty was to be imposed if the service tax was paid before a specified date. Drawing parallels to a previous case involving architectural services, the Member set aside the Commissioner's order and reinstated the original Adjudicating Authority's decision, emphasizing the lack of penalty imposition in similar circumstances as per legal precedents.

3. The judgment was pronounced on 27-2-2008, disposing of the appeal in favor of the appellant based on the arguments presented regarding the penalty imposition and the applicability of relevant legal principles established in previous cases. The decision highlighted the importance of adhering to established legal interpretations and precedents in matters concerning penalty revisions and the exercise of discretion by the Adjudicating Authority and the Commissioner.