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2014 (12) TMI 328 - CESTAT AHMEDABADLevy of Penalty u/s 76 and 78 - short payment of service tax - Held that:- As regards penalty u/s. 78 of the Finance Act, 1994, according to Sec. 73 of the Finance Act, when shortfall of payment occurs because of suppression/mis-declaration if the assessee paid the amount with interest and 25% of the tax towards penalty before issuance of show cause notice, further proceedings need not be initiated. In this case, but for the investigation taken up by the Revenue, appellant would not have paid the amount of service tax as has been demanded. On the ‘Outdoor Caterer’ service, the appellant has not paid service tax at all and the appellant had also not paid the correct amount of service tax on the consideration received for the services rendered by them over a few years. In such a situation, penalty u/s. 78 is imposable and has been correctly imposed. Coming to penalty u/s. 76 of the Finance Act, 1994, there are decisions taking a view that penalties are imposable u/s. 76 & 78 of the Finance Act, 1994 prior to April, 2008 when Section 78 was amended to provide for no penalty u/s. 76 when penalty has been imposed u/s. 78. However, in this case, taking note of the fact that total amount short-paid is less than ₹ 50,000/- and it has occurred for a period of three financial years and obviously the appellant is not a big service provider. Moreover, as soon as the omission was pointed out, the appellant paid the service tax with interest. Further, it is also found that the appellant had correctly calculated the service tax payable by them with interest. The action of the assessee for verification of records before initiation of the proceedings would show that the omission could have occurred due to ignorance/improper accounting. Therefore, I find that it can be said that the appellant has shown reasonable cause for non-imposition of penalty u/s. 76 of the Finance Act, 1994 - Decided partly in favour of assessee.
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