TMI Blog2019 (2) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... case is that the alleged non-payment came to the notice of Department only on audit of records of the appellant by the Department. But there has been catena of decisions that mere non-payment may not suffice to be clothed with the grave allegations as that of fraud and mis-representation unless and until there is evidence about a positive act on part of appellant, as produced by Department, to prove that appellant had intent to not to pay the duty. The apparent fact of the appeal is that the appellant has not contested the liability and in fact has prayed for his sufficient cenvat credit available to be utilized against the said demand - The transaction charges were subjected to levy of tax for the first time w.e.f 16-05-2008 without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ₹ 5,20,369/- (being a calculation error) alongwith the interest. The penalty under Section 76 of the Act was done away. However a penalty proportionate was imposed under Section 78 of the Act. Being aggrieved, an appeal was preferred. Commissioner (Appeals) vide Order-in-Appeal No.287 dated 14.06.2018 has upheld the order. Being aggrieved, the appellant is before this Tribunal. 2. I have heard Mr. Varun Khandelwal, ld. Advocate for the appellant and Ms. Tamanna Alam, ld. A.R. for the Department. 3. It is submitted on behalf of the appellant that though their initial argument was that they were not liable to pay service tax qua the transaction charges as they were receiving the same as agent. But their alternate argument is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act was denied to be invokable. Appeal is accordingly prayed to be dismissed. 5. After hearing both the parties, perusing the record of the present appeal and keeping in view the submissions of the parties, I observe that the narrow compass of present adjudication is as to whether the penalty of Section 78 is imposable in the given circumstances. 5.1 For the purpose Section 78 reads as follows:- SECTION 78. Penalty for failure to pay service tax for reasons of fraud, etc. - (1) Where any service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, by reason of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation. - For the purposes of this sub-section, specified records means records including computerised data as are required to be maintained by an assessee in accordance with any law for the time being in force or where there is no such requirement, the invoices recorded by the assessee in the books of accounts shall be considered as the specified records. (2) . (3) ... 6. Thus, it is clear that whenever the element as that of fraud, collusion, willful mis-statement or suppression of fact is apparent on the part of the appellant as a ground for non-payment of the service tax that the appellant is liable to be imposed with the penalties under this section. The appellant herein has taken the ground of bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt fact of the appeal is that the appellant has not contested the liability and in fact has prayed for his sufficient cenvat credit available to be utilized against the said demand. 8. The transaction charges were subjected to levy of tax for the first time w.e.f 16-05-2008 without any intention to amend the ‗forward contract service already existing at that time. 9. Further, the CBEC vide Letter F. No. 137/57/2006-CX-4 Dated: May 18, 2007 also issued instruction on transaction charges stating that the same is not liable to Service Tax. For better appreciation, the relevant para of such letter is reproduced below: The transactions charges collected by the Exchanges are based on the quantum (in money value) of transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er/seller of securities and the broker pays the same acting as a Pure Agent the same are not includible in the taxable amount in terms of Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006. All other charges by whatever name called recovered by the broker from the buyer/seller of securities are includible in the taxable value in terms of Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006. 11. Period of impugned demand is 2007-2011. Hence the above discussed case law is sufficient to hold that the appellant had bonafide belief to not to be liable to pay tax qua transaction charges. No malafide can be attributed. In case of Uniworth Textiles Limited V/s CCE, Raipur [2013] 31 Taxmann 67 (SC) Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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