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2016 (3) TMI 671 - CESTAT AHMEDABAD

2016 (3) TMI 671 - 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/13127/2013 - 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 Order-in-Appeal setting asi .....

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ustomers 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 penalties imposed on them by .....

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the table below:- Year 2007-08 2008-09 2009-10 2010-11 Amount of sundry debtor for last F.Y. 0 2237114 3217922 4506939 Billed Amount for the current F.Y. 4468682 7423170 10800176 31450936 Amount of sundry debtor for the current F.Y. 2237114 3217922 4415938 13262796 Net realised amount for the F.Y. on which S.Tax required to be paid (a)+ (b) - (c) 2231568 6442362 9602160 22695076 Rate of service tax 12.36% 12.36% 10.30% 10.30% Amount of service tax payable 275822 796276 989022 2337593 He contende .....

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iod also, though belatedly. He submits that service tax has been demanded on the amount collected and received by the Respondents from 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 .....

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the learned Chartered Accountant appearing for Respondents submits that they are not contesting the demand of service tax liability and 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 we .....

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issuance of show cause notice itself. He submitted that this is a fit case for invoking the provisions of Section 80, and not to impose penalty under Section 78. He further 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.c .....

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io. 4. On careful consideration of the arguments of both sides and perusal of the records, we observe that the Respondent had taken registration in April 2008 and was also availing CENVAT credit on the inputs. Therefore, we find force in the arguments of the learned Authorised Representative for Revenue that the Respondent was aware of his responsibilities and procedures and non-payment of service tax on due dates were not a mistake. Normally in such cases, we would have held that penalty under .....

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