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TMI Blog2024 (10) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from time to time. This amount is held to be recoverable from the party. As the party have deposited amount of service tax Rs 475,391/- vide GAR-7 No 2 dt 13.07.2011 to the Govt Exchequer. Therefore, I order for appropriation of the same against the total liability of Rs 457,364. The amount, if any noticed not paid on account of short payment of service tax and interest for the delayed payment of service tax by the party is payable in terms of Section 75 of the Finance Act, 1994. 2. I impose penalty of Rs.5,000/- u/s 77 of the Act for violation of Section 70 read with Rule 7 of the Rules. 3. I impose penalty of Rs.5,000/- u/s 77 of the Act for violation of Section 69 read with Rule 4 of the Rules. 4. I impose penalty Rs.457,364/- under Section 78 of the Finance Act, 1994. However, penalty imposed under this Section shall stand reduced to 25% of the Service Tax amount if the entire dues including Service Tax, Interest and penalties imposed as above are paid within 30 days from receipt of this order . " 2.1 Appellant is registered as service provider, providing services mainly to M/s Hindalco Industries Ltd., Renukoot, Sonbhadra. 2.2 On scrutiny of records of M/s Hindalco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on merit except on the ground of quantification of demand in as much as the gross payments received include the amount of service tax, amount pertaining to a particular service not taxable prior to a particular date. Calculation chart provided by the party is as under - Summary of calculation for tax liability of M/s Industrial Fabricators, Details Amount Amount Gross Turnover as per SCN 4489144.00 Less PF included in gross turnover 418530.00 Less service prior to 16.06.2005 118675.00 Less service tax paid by Hindalco 0.00 537205.00 Net taxable turnover 3951939.00 Service Tax 475390.59 Less already paid as per SCN 0.00 Net tax payable 475390.59 That the party are a contractor who is not having enough knowledge about the complex provisions of service tax and at the same time there is no help available in the form of outside consultants/experts in the subject from whom proper guidelines could have been obtained. That the party has taken registration on its own and has been depositing tax and return thereafter on regular basis. That the party have deposited the service tax, due as per the chart for cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is that (i) Entire demand was revenue neutral (i) imposition of penalty was not sustainable since the service tax itself was not payable and (ii) Section 80 will apply in the present case. 7. have examined the plea advanced by the appellants on the issue of category of service. I find that the appellants in their written submissions filed during personal hearing have admitted liability of payment of service tax and have paid the amount of service tax under demand though they themselves have admitted nonpayment of amount of interest payable thereon as well as penalty. I find that the appellants in their written submissions have admitted as under - "The appellant is not very conversant and is lacking with the stringent provisions of law and to interpret the same in the legal framework. The appellant has not contested on classification of services merely because the same was not easy to segregate from the total quantum of job undertaken and appellant had no expertise to do so." I find that in the impugned SCN, all the taxable services which are relevant in appellant's case have already been taken into account and expressly mentioned. In view of above, the plea advanced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 1994." I also find that the adjudicating authority on Page 6 have further observed and held as under- "I observe that the party has consciously and deliberately suppressed the value of taxable service and never disclosed the payment received or services rendered by them. As I have observed herein above, in this case the paety was conscious that the services being provided by them are taxable services liable to service tax and they collected the service tax from the service recipient but did not deposit the same in clear disregard to the law." I observe that these findings remained uncontroverted by the appellants 9.1 In terms of statutory arrangements the responsibility of assessment of service tax rests on the person liable to pay the service tax. The arrangement of self assessment called upon appellants to determine their tax liability correctly. It was for them to make assessment. There is nothing on record to show that the appellants ever made any effort or enquired from the department or even from service recipient about the taxability on the services provided by them. But for the intervention of department, the evasion of service tax would have gone on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the extended period or the demand of service tax. Appellant has suo motto computed the service tax due and has paid the said amount. He made the submission to this effect before the original authority and also before the appellate authority. He also pleaded his lack of knowledge and status as petty contractor not having means to understand the complexity of taxation of services. Both the authority agree to these submissions and have still gone on to impose heavy penalties under Section 77 and 78 of the Finance Act, 1994. Taking note of undisputed findings with regards to status of appellant and his compliance even before the adjudication has been undertaken we do not find any justification for not having considered extending the benefit of Section 80 of the Finance Act, 1994 and waiving of all the penalties imposable on the appellant. 4.6 In view of the discussions as above, we do not find any merits in the impugned order to the extent it is in relation to the penalties imposed on the appellant. This is a fit case where penalties imposable under Section 77 and 78 should have been waived in terms of provisions of Section 80 of the Finance Act, 1994. 5.1 Appeal partly allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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