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M/s. G.V. Alurkar Versus Commissioner of Central Excise & Service Tax, Kolahapur

2017 (8) TMI 439 - CESTAT MUMBAI

Penalty u/s 78 of FA, 1994 - demand was confirmed u/s 73A(4) of the Finance Act, 1994 - Held that: - From the above plain reading of the Section 78 it can be seen that penalty under such Section can only be imposed when service tax is determined under Sub-Section (2) of Section 73 - in the present case admittedly the service tax was determined under Section 73A(4) of the Finance Act, 1994. Therefore the penal provisions of Section 78 is consequentially not applicable in the case of demand of ser .....

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vided services of Goods Transport by Road to some of their customers, issued invoices for transportation charges and service tax thereon and also recovered the same from them. They failed to pay the service tax amount so collected by them to the Government account. During the said period they also provided services of Rent-a-Cab and recovered charged from their customers, on which no service tax was paid. They also failed to obtain service tax registration for these two services namely Goods Tra .....

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service tax, however the appellant failed to pay the service tax. The show cause notice was issued which was culminated to adjudication order wherein the adjudicating authority has passed the following order. ORDER (i) I confirm the service tax charged and collected by M/s. G.V. Alurkar, from specified persons in respect of goods transport service amounting to ₹ 66,42,697/- (Service Tax ₹ 64,49,281/- Ed Cess ₹ 1,28,937/- H. Ed. Cess ₹ 64,479/-) under the provisions of Se .....

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Section 73 of Finance Act, 1994. (iii) I confirm service tax amounting to ₹ 44,725/-(S.Tax ₹ 43,777/- + Ed. Cess ₹ 873/- +H. Ed. Cess ₹ 73/-) towards the service of rent a cab operator provided by them under the provisions of sub-section (2) of Section 73 of Finance Act, 1994. The amount of ₹ 44,725/- confirmed above is appropriated from the amount already paid. (iv) I order to pay the interest on the confirmed demands (i), (ii) and (iii) above under section 75 of .....

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f ₹ 5,000/- on M/s. G.V.Alurkar, under Section 77 of the Finance Act 1994 and I also refrain from imposing penalty under Section 76 of the Act ibid. Being aggrieved by the aforesaid impugned order, appellant filed this appeal. 2. Shri Vinay Jain Ld. Chartered Accountant appearing on behalf of the appellant submits that on merit they are not contesting the demand however there are some quantification error in the demand which was not considered by the adjudicating authority. He mainly conte .....

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ermined under Section 73A (4) of Finance Act, 1994 the penalty under Section 78 was imposed. He submits that the penalty under Section 78 is imposable only in respect of that duty which was determined under Sub-Section (2) of Section 73 of Finance Act. However the penal provision of Section 78 is not applicable in a case where the service tax is determined under Section 73A(4) of the Finance Act. In this regard he placed reliance on the following judgments. (i) Ajay Kumar Gupta Vs. CESTAT 2015 ( .....

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order. He submits that whether under Section 73A(4) or Section 73(1) of the Act, service tax determined, the assessee is liable to pay such service tax accordingly they are liable for penalty under Section 78 of the Finance Act. 4. We have carefully considered the submissions made by both the sides. The main issue to be decided is that whether in the facts and circumstances of this case, penalty under Section 78 is imposable. We find that the demand of ₹ 66,42,697/- was admittedly confirme .....

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manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub- section (1) or sub-section (2) .....

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t specified in the notice, and thereupon such person shall pay the amount so determined. Penalty in the present case was imposed under Section 78 prevailing at the material time, reads as under: 78. [Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made th .....

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rmined under sub-section (2) of section 73, and the interest payable thereon under section 75, is paid within thirty days from the date of communication of order of the 3[Central Excise Officer] determining such service tax, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the service tax so determined. From the above plain reading of the Section 78 it can be seen that penalty under such Section can only be imposed when service tax is det .....

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