TMI Blog2019 (1) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... lieu for subsuming in an asset that will vest with the issuer cannot, by any stretch, be deemed to be consideration - It is, therefore, not the ‘non-monetary consideration’ referred to in section 67 of Finance Act, 1994 and the relevant Rules. Penalty u/s 78 of FA - Held that:- The appellant is a provider of services against contract that also involves supply of goods which would take the activity beyond the ambit of tax under the provisions that have been held to be service simplicitor. In these circumstances, and the due discharge of tax liability on the undisputed portion of the demand, imposition of penalties under section 78 of Finance Act, 1994 is not appropriate. The recovery of tax of ₹ 10,07,854 and penalty imposed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-15 dated 26th March 2015 of Principal Commissioner of Service Tax, Pune, while reducing demand of ₹ 15,29,533 pertaining to receipts on contracts executed before introduction of the new levy and acknowledging payment of tax of ₹ 78,98,139, discarded the claim for other deductions beyond ₹ 1,871 on bad debts to crystallise the tax liability at ₹ 92,64,092 besides confirming other detrimental consequence. With the plea that tax liability, along with interest, had been discharged in full, he seeks setting aside of penalties under section 76, 77 and 78 of Finance Act, 1994 by placing reliance on the decision of the Hon ble High Court of Bombay in Commissioner of Service Tax, Mumbai v. SR Enterprises [2008 (9) STR 123 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of ₹ 10,07,854 on receipts that, admittedly, had not been received by the appellant and the imposition of penalty in the circumstances pleaded by the appellant. That the dispute over billed amount of ₹ 36,936 and the reduction of consideration to the extent covered by debit notes continues has been affirmed by the adjudicating authority; on the latter, it is his finding that these represent the value of goods supplied by the customers and constitutes partial shift in fulfillment of contractual responsibility assumed by the appellant without altering the scope of the service rendered. According to the adjudicating authority, the provisions for valuation of service in Finance Act, 1994, and the appurtenant Rules, require the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Hon ble Supreme Court in Commissioner of Central Excise Customs, Kerala v. Larsen Toubro Ltd [2015 (39) STR 913 (SC)] has squarely distinguished the scope of services, such as that in section 65(105)(zzq), from works contract for levy of tax under Finance Act, 1994. The appellant is a provider of services against contract that also involves supply of goods which would take the activity beyond the ambit of tax under the provisions that have been held to be service simplicitor. In these circumstances, and the due discharge of tax liability on the undisputed portion of the demand, imposition of penalties under section 78 of Finance Act, 1994 is not appropriate. 7. For the above reasons, we set aside the recovery of tax of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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