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2017 (3) TMI 1508 - AT - Service TaxPenalty u/s 77 and 78 of FA - appellant's claim that deduction for cost of materials supplied, which is included in the gross amount have not been given, resulted into wrong demand - Held that: - the appellant is entitled to deduction of the material component from the gross amount - as the appellant had paid the taxes and it appears have paid rather more amount then the amount actually payable as per the calculation produced before this Tribunal, which is categorical fact on record. Accordingly, the penalty u/s 78 set aside. However the penalty u/s 77 for ₹ 5000/- is retained - also, upon reducing the material component the turnover for the financial year remains ₹ 7,34,425/- and for this year for the first time the turnover is exceeding four lakhs, they will be entitled to the threshold exemption. Accordingly, the benefit of threshold exemption for the financial year 2005-06 is allowable under N/N. 6 of 2005-ST - matter on remand to the Adjudicating Authority for the limited purpose of recalculating the tax payable, after allowing the threshold exemption and the set off for material component - appeal allowed in part by way of remand.
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