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2016 (12) TMI 396 - AT - Service TaxImposition of penalty u/s 78 of the Finance Act, 1994 - the amount of service tax collected wrongly but not deposited with the government - after being pointed out by the department, same was deposited with interest - Held that:- The said amount collected by appellant does not fall under any of the category of the services that are taxed as at the most the said collection of amount by appellant for permitting to use the road can be under rent/lease of open space which is not taxable for the reason, during the relevant period hence tax liability on the amounts received on leasing of open spaces is itself in question. The provisions of Section 78 of the Finance Act, 1994 does not envisage any penalty on the amount collected as service tax and not paid to the Government treasury covered under Section 73A of the Finance Act, 1994 - In the case in hand none of the provisions of the Section 73A of the Finance Act, 1994 are applicable, as appellant has collected an amount which is representing service tax. In view of this, the provision of Section 78 would not apply in the case in hand. Similar issue fell for consideration by the Hon'ble High Court of Punjab & Haryana in the case of Ajay Kumar Gupta [2015 (5) TMI 566 - PUNJAB & HARYANA HIGH COURT] wherein the Lordships held that Once the service tax was not leviable under Section 68 at that point of time and the liability was only to deposit the tax under Section 73A(2), which has been done on 15.11.2008, after delay, but due to the service being not taxable at the relevant time when the invoices were raised, we are of the opinion that the case would not fall under the provisions of Section 78 for invoking of the penalty, as has been held by the Tribunal. It was the categorical stand of the appellant before the First Appellate Authority that the service tax had been collected by mistake, on account of the new provision and the office of the appellant was not fully acquainted with the interpretation of the statute due to which the default had occurred and therefore, in view of the defence taken, the Tribunal was not justified, in the present facts and circumstances, to hold that there was a wilful suppression of facts, to bring it within the ambit of Section 78. Penalty u/s 78 set aside - appeal allowed - decided in favor of appellant-assessee.
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