TMI Blog2024 (3) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... - HON BLE MR. SANJIV SRIVASTAVA , MEMBER ( TECHNICAL ) Absent on call for the Appellant Shri A. K. Choudhary , Authorized Representative for the Respondent ORDER SANJIV SRIVASTAVA : The present case is in relation to the personal penalty imposed on the appellant in terms of Section 78A of the Finance Act, 1994. The Original Authority vide Order-In-Original imposed a penalty of Rs.5 lakhs on the appellant which by the provisions of Section 78 has been reduced to Rs.1 lakhs by Commissioner (Appeals). Matter has been listed in the past on 18.08.2023, 22.09.2023 and then thereafter today. 1.2 In terms of the proviso to Section 35 C (1A) providing as under the matter cannot be adjourned further and hence taken up for consideration after hearing the learned Authorized Representative in the matter as the appellant has not been appearing neither making any communication with the Bench. 2.1 The issue is in a very narrow compass. The appellant is one of the partners in a partnership firm M/s Health Sanctuary, Noida. Additional Commissioner while confirming the demand of Rs.55,01,364/- against the partnership firm has imposed penalty on the appellant:- xi. I also made responsible Ms. Shubhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n noticee. The appellant has Contended that there was supplementary agreement dated 31.03.2012 that all the liabilities regarding taxes and penalties are sole responsibility of Orb Health Sanctuary. I find that the name of Ms Priya Chhatwal, as a partner of the Main noticee, have been mentioned in the documents submitted by them to different government authorities (Income Tax/ Service Tax) etc., then the appellant cannot escape from her responsibility from the government dues against the said firm by virtue of some mutual agreement without informing the department within time about the said agreements. I agree with the findings of the adjudicating authority that it is nothing but an afterthought, an attempt to escape responsibility. The appellant has further submitted that M/s New Spice Wellness and M/s Health Sanctuary(main noticee) have signed an Indemnity bond on 14.12.2017, by which New Spice had been indemnified of liability of Service tax. I find that the said bond was made in December 2017 i.e. after issuance of instant Show Cause Notice on 14.11.2017, wherein the proposal of personal penalty on the appellant after investigation was already done by the department. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made against the appellant to have been actively involved in running of the business in anime and style Health Sanctuary . On the contrary it has been held that Mr R H Chaudhary and Ms Shubhi Kamal were running the business. No specific finding has been recorded against the appellant. 3.4 The section 78A of the Finance Act, 1994 reads as follows: SECTION 78A. Penalty for offences by director, etc., of company Where a company has committed any of the following contraventions, namely : (a) evasion of service tax; or (b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable service in violation of the rules made under the provisions of this Chapter; or (c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or (d) failure to pay any amount collected as service tax to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, then any director, manager, secretary or other officer of such company, who at the time of such contravention was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of acknowledgement that the non-payment was due to unavoidable circumstances as that of grave medical illness of the spouse of the appellant who finally succumbed to that illness on 24th June, 2017. This fact has been brought to the notice of the Department since the time the Show Cause Notice has been issued but the same has not at all been considered by the Adjudicating Authority below. 9. The authority has miserably failed to distinguish the non-payment of tax for the reasons beyond the control of the assessee from the situation where the assessee has failed to deposit tax with the sole intention to not to deposit the same. Section 78/78A can be attracted only in the later situation. I observe that there are ample medial documents on the record of this appeal. Perusal whereof reveals that the spouse of the appellant was diagnosed a brain lesion way back in the year 2005 when he was for the first time operated. The surgical interventions were repeated as it was again in 2008, 2014 and lately in 2017 thereafter he even went into Coma and finally passed away. This situation definitely was one of the gravest situations for the present appellant to actually to not be fully aware ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
