2023 (5) TMI 524 - AT - Service Tax

Levy / waiver of penalty - duty liability along with interest and also 25% of the penalty paid on receipt of the communication of the Original Authority - requirement to pay the balance penalty - HELD THAT:- The Hon’ble High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. PANNU PROPERTY DEALERS, LUDHIANA [2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT] did not categorically hold that the imposition of penalty under Section 76 and Section 78 separately is not mutually exclusive prior to 10.05.2008, Hon’ble High Court has certainly held that the Appellate Authority was within its right to hold that the penalty is mutually exclusive and in the spirit of the amendment. While the amount involved in the above case was Rs.51,026/-, the amount involved in the instant case is about half that amount. Therefore, in deference to the jurisdictional High Court’s order, we find that penalty under Section 76 and 78 can be seen to be mutually exclusive even before the amendment.

In the facts and circumstances of the case and looking into the fast changes that were coming in the Service Tax law during the relevant period, it can be concluded that the appellant being a small operator had no wherewithal to keep track of the law and thus, the applicability of the Service Tax to him, more so looking into the fact that the main cable operator M/s SIFY had discharged Service Tax on the entire amount collected from the customers, there are reasons to believe that there were sufficient reasons for the appellant in not discharging the applicable Service Tax. Looking into the conduct of the appellants in depositing the tax with interest and 25% penalty the provisions of Section 80 are invited and the benefits of Section 80 can be extended to the appellants.

The appeal is partly allowed by setting aside the penalties imposed.