TMI Blog2011 (3) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... ete waiver of penalty under section 76 of the Finance Act 1994 - ST/341/2007 - ST/81/2011 - Dated:- 3-2-2011 - D N Panda, Mathew John, JJ. For Appellant : Shri B L Narasimhan, Adv. For Respondent : Shri Amrish Jain, SDR Per: D N Panda: Ld. Counsel submits that at the initial stage of introduction of law for levy of service tax under Finance Act 1994 in respect of security services, there were several confusions about the gross value of the service to become measure of value for payment of service tax. Only because of the confusion there was a discrepancy between the return and the profit and loss account. While Revenue's claim is that entire value of payments received from the consumer of service shall be taxable, the appellant pleads bonafide belief that statutory payments like ESI, PF etc. received, not being consideration for the services, shall not be taxable. Similarly they plead that the profit earned on the activity shall not be taxable, so also certain other expenses. According to the appellant with the bonafide conception the appellant submitted the return and disclosed the receipts. There was no suppression of fact made by them in respect of the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tements. The authority did not give any concession on the statutory dues. It comes out from para 8 9 of the appellate order at page 10. 8. So far as the contention of the appellant in respect of time bar issue and also adjudication under section 73 is concerned, the appellate authority dealt with the issue in para 10 and he found that one of the element like suppression, which is essential ingredient in section 73 is present. Therefore, he held that the proceeding was well within time. When he found all these aspects, he made the appellant liable to pay penalty also. He did not give any concession in respect of penalty. 9. We do agree with the ld. Appellate Authority in the matter of the discrepancy noticed by him in respect of the considerations received and appearing in different manner in two different statutory documents. While the ST 3 return was statutory document under Finance Act 1994, the balance-sheet and profit and loss account were statutory documents under Companies Act 1956. Therefore, when the public documents bring the discrepancy, the onus of proof was on the assessee to come out with clean hand to prove its stand. When we did not find any merit on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the consumer. 7. In the light of what is stated above, it is clear that Service Tax is a VAT which in turn is destination based consumption tax in the sense that it is on commercial activities and is not a charge on the business but on the consumer and it would, logically, be leviable only on services provided within the country. Service tax is a value added tax. 8. As stated above, service tax is VAT. Just as excise duty is a tax on value addition on goods, service tax is on value addition by rendition of services. Therefore, for our understanding, broadly "services" fall into two categories, namely, property based services and performance based services. Property based services cover service providers such as architects, interior designers, real estate agents, construction services, mandapwalas etc.. Performance based services are services provided by service providers like stock-brokers, practicing chartered accountants, practicing cost accountants, security agencies, tour operators, event managers, travel agents etc." 7. The nature and character of service tax has also been explained by Apex Court in para 22 of the judgment Association of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elements : the person, thing or activity on which tax is imposed. Thus, every tax may be levied on an object or on the event of taxation. Service tax is, thus, a tax on activity whereas sales tax is a tax on sale of a thing or goods. Law as it stood before the Constitution (Forty-Sixth Amendment) Act, 1982:" 8. When logic of service tax incidence call for taxation of service on the gross value of taxable service and there is no specific deduction allowed under statutory provisions to dimish the value of taxable consideration of taxable service, in absence of such provision in law, learned Commissioner (Appeals) committed error of law to exclude the expenses reimbursed by the service recipient to service provider from the purview of taxation. We are fully in agreement with learned DR to follow the decision made by the Division Bench of Tribunal in the case of Naresh Kumar Co. Pvt. Ltd. vs. CST, Kolkata (supra). Our view aforesaid is fortified by the ratio laid down in para 6.10 of the said judgment to allow the appeal of revenue. Accordingly, we allow the appeal of revenue setting aside the first Appellate order and restoring the order-in-original" 10. When there is no pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder within the statutory period so that the appellant may get concession of limiting the penalty to 25% of the tax. The authority shall examine these aspects and pass proper order, if there is penalty. 14. So far as the penalty under section 77 is concerned, we do not consider it proper to grant any immunity to the appellant because in para 7 at page 9, the authority noticed that the appellant never submitted the ST3 return in time. Therefore, the penalty imposed under section 77 is confirmed. So far as the penalty imposed again under Rule 77 for non-furnishing the documents is concerned, there appears no reason recorded by the appellate authority to confirm the order on such aspect. Therefore, the appellant gets relief for the order not being a speaking order for imposition of penalty of Rs.10,000/-. Section 78 expressly provides that once penalty under section 78 is imposed no penalty shall be leviable under section 76. So penalty under section 76 is waived. 15. In the result, the appeal is dismissed except granting relief partly under section 78 subject to condition therein and complete waiver of penalty under section 76 of the Finance Act 1994. We make it clear that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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