TMI Blog2009 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... the territorial waters of India are not liable to Service Tax was valid and in force until it was withdrawn on 10.05.07. It cannot be accepted that the assessees could not have had a bonafide belief on the basis of the above. – Penalties imposed u/s 76 and 78 deleted. - S/73/2008 - 1072/2009 - Dated:- 28-8-2009 - Ms. JYOTI BALASUNDARAM, Vice President and Dr. CHITTARANJAN SATAPATHY, Technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file ST3 returns has been imposed. A penalty of Rs. 2,45,13,530/- has also been imposed under Section 78 of Chapter 5 of Finance Act, 1944 for deliberate suppression of the value of taxable service with the intent to evade payment of service tax. 2. We have heard both sides. It has been held by the Hon'ble High Court of Bombay in the case of Indian National Shipowners Association Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held such a service is not exigible to tax, the tax liability will be required to be re-determined. 3. As regards the penalties, the assessees do not dispute the liability to penalty in terms of Section 77 which we uphold the same and as far as the penalties under Section 76 and 78, the assessees seek shelter under the provisions of Section 80 of the Finance Act which provides that notwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian land mass. Chapter V of the Finance Act which governs the levy of Service Tax has not extended to the levy to designated areas in the Continental Shelf and the Exclusive Economic Zone of India (as has been done in case of Central Excise vide Notification No. 166/87-C.E., dated 11.6.87 and in case of Customs by Notification Nos. 11/87-Cus., dated 14.01.87 64/97-Cus., dated 1.12.97). It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the service provided outside beyond the territorial waters of India are not liable to Service Tax was valid and in force until it was withdrawn on 10.05.07. It cannot be accepted that the assessees could not have had a bonafide belief on the basis of the above. We accept the plea of the assessees based upon the circular and set aside the penalties imposed under the provisions of Section 76 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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