2009 (2) TMI 108 - HC - Service Tax

Order-in-original does not record any finding of fraud mis-statement etc. - Accordingly the Assessing Authority rightly exercised the power under Section 80 and decided not to impose any penalty under Section 78. There was no basis for the Revisional Authority-cum-Commissioner while exercising revisional power under Section 84 to acquire the jurisdiction to impose penalty. There is no evidence produced before the revisional authority or any other authority to prove fraud collusion misrepresentation etc. - Tribunal has rightly restored the order of the Assessing Authority

Summary

The High Court of Punjab & Haryana, in the 2009 case of 2009 (2) TMI 108, heard the revenue's challenge against an case dated 31.3.2008 by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, invoking Section 35G of the Central Excise Act, 1944. The main issue was whether the Tribunal was justified in setting aside a penalty under Section 78 of the Finance Act, 1994, which had been enhanced by the Commissioner under Section 84 of the Act. The Tribunal had found that the assessee had suppressed the value of taxable service, but the High Court disagreed. The Court held that the provisions of Section 80 of the Act clearly state that no penalty should be imposed if the assessee has shown reasonable cause for the failure, and in this case, there was no finding of fraud, collusion, or suppression of facts. The Court concluded that the Tribunal had rightly restored the order of the Assessing Authority, and as a result, the appeal was dismissed. This judgement highlights the importance of adhering to the specific provisions of the law when imposing penalties on taxpayers.