TMI BlogHow to make new section 76 and 78 attractive?X X X X Extracts X X X X X X X X Extracts X X X X ..... How to make new section 76 and 78 attractive? - By: - vasudevan unnikrishnan - Service Tax - Dated:- 27-6-2015 - - As we know, the discretion in imposing penalty under 76 and 78 has been taken away and section 80 stands abolished from 14/05/2015. Simultaneously,the sections 76 and 78 has been revised,giving an option for assessees to compound the cases at their level, by paying the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and interest within stipulated time limit of 30 days of receipt of SCN.Another option is also available--Only reduced penalty only need be paid under s.76 and 78 , even after the receipt of the adjudication orders . There was an amnesty for all the pending SCNs till 14/06/2015, in terms of section 78B .There was no much publicity for this.However, by all means,there would have been very f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew takers. Even hereafter, the willing assessees to opt for the new SCNs /orders issued after 14/05/2015 will be deprived of the same, just because of the faulty procedure adopted in the issue of SCNs and orders there on.Let us see what are the reasons like: (i) Even though the section 67(2) clearly provides that wherever the demands are raised relying on the amount received ,the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cum duty has to be allowed,in practice,almost all the SCNs and orders deny this.This results in the excess demand and thus depriving the assessees to opt for the new sec.76 or 78 . (ii) Even though entire details would have been made available to the dept., the SCNs are invariably issued for extended period as per proviso to sec.73(1) and thus proposing penalties under s.78 in all SCNs . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The scrutiny of ST3 returns,verification of balance sheets etc are now left to the audit parties and the role of Range officers in such work or providing proper guidence to the needy assessees is alarmingly missing, now a days. Admittedly,this also will be an impediment to avail the new provisions. (iii) The demands under RCM are issued for the amount paid as salary to the full time Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s,alleging the suppression,even though the copies of balance sheet would have been filed with the dept. This is a clear case of misuse of process of law,especially when these demands are revenue neutral.In the recent apex court judgment in the case of Nirlon Limited Vs, CCE,Mumbai, 2015 (5) TMI 101 - SUPREME COURT , it has been ordered that in Revenue neutral demands,the extended period and penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty are not justified. (iv) Wherever the admitted liability tax would have been paid during the investigation ,or the audit party's visit, the SCNs are issued including this amount also,thus escalating the demands and proposing the pro rat penalties. The orders in such SCNs are also getting confirmed for the escalated amount and imposing equal penalty.This is also another impediment to opt f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the new s.76 and 78 . 3.There could be many such instances.However,it is suggested that the CBEC should come out with clear instructions to avoid the instances of the type mentioned above and thus encourage the number of optess for the new scheme. The desired intention to reduce the litigation and rigours of process to issue and adjudication orders,then appeal etc can be achieved only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such nagging issues are avoided. Unnikrishnan.V, Cochin. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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