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2016 (3) TMI 670 - CESTAT AHMEDABAD

2016 (3) TMI 670 - CESTAT AHMEDABAD - TMI - Imposition of penalties for the period 2007-08 to 2010-11 - Sections 76 & 78 of the Finance Act, 1994 - Respondents paid almost the entire amount of service tax due before issuance of show cause notice - Held that:- the legislature in its wisdom has also amended the provisions of Section 78, albeit from 01.4.2011, that the penalty under Section 78 may be reduced to 50% when true and complete details of the transactions are available in the specified re .....

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w cause notices are issued after the date of amendment, penalties under Section 76 and 78 simultaneously cannot be imposed and hence setting aside the penalty under Section 76 is uninterferable. - Decided partly in favour of the Revenue - Appeal No. ST/13126/2013 - ORDER NO. A/10050/2016 - Dated:- 22-1-2016 - P. M. Saleem, Member (T) For the Appellant : Shri S K Shukla, AR For the Respondent : Shri Abhishek Doshi, CA ORDER Per P M Saleem Revenue has filed this appeal aggrieved by the impugned Or .....

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ax collected from the customers to the Govt. exchequer except for a meagre sum which was paid by way of adjusting cenvat credit taken on the inputs. The adjudicating authority confirmed the demand of service tax alongwith interest, and imposed penalties, including penalties under Section 76 and 78 of the Finance Act, 1994. In the appeal filed before the Commissioner (Appeals), the Respondents have not contested the service tax liability or interest thereupon. However they contested levy of penal .....

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,776/-, as detailed in the table below:- Year 2007-08 2008-09 2009-10 2010-11 Amount of sundry debtor for last F.Y. 0 771399 2010618 1879095 Billed Amount for the current F.Y. 917534 5377109 6723043 9922263 Amount of sundry debtor for the current F.Y. 771399 2010618 1879095 4769796 Net realised amount for the F.Y. on which S.Tax required to be paid (a)+ (b) - (c) 146135 4137890 6854566 7031562 Rate of service tax 12.36% 12.36% 10.30% 10.30% Amount of service tax payable 18062 511443 706020 72425 .....

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m their customers, and this amount includes the Service Tax component also. Therefore, the Respondents were duty bound to remit the service tax amount collected by them from their customers to the Government on due dates. He also contends that Respondents were aware of their responsibilities and obligations as they were a registered service tax assessee from April 2008. He also drew attention of the Bench to the fact that the Respondents were availing the CENVAT credit on the inputs received, wh .....

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nd interest thereon. Their plea is that the imposition of penalty under Section 76 and 78 is harsh, as they were not in a position to pay the service tax amount because of their financial constraints. He submits that huge payments from the customers were outstanding as is evident from the table in the OIO (which is reproduced at Para 2 above), and therefore they were finding it difficult to run the business itself. He further submits that there was no intention to evade the service tax and the a .....

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submits that there are provisions that no penalty can be imposed under Sections 76 and 78 simultaneously and the said provisions are applicable for the period prior to 10.05.2008 also. He relied upon the decision of the Tribunal in the case of Jivant Enterprise vs. Commissioner of Service Tax, Ahmedabad - [2012] 27 taxmann.com 196 (Ahd. CESTAT). He also draw our attention to the amendment made in Section 78 of the Finance Act, 1994 from 01.4.2011 to the effect that penalty shall be reduced to 50 .....

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