Stark Communications Pvt Ltd vs Commissioner Of Service Tax ...

[Arising out of Order-in-Appeal No. 331-2011 dated 06/05/2011 passed by CCE(Appeals), Bangalore]

For approval and signature:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Stark Communications Pvt Ltd No.11142, 1st Cross, 12th Main, Hal 2nd Stage, Indiranagar, Bangalore 560 008 Appellant(s)

Versus

Commissioner of Service Tax BANGALORE-SERVICE TAX NULL 1ST TO 5TH FLOOR, TTMC BUILDING,above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)

Appearance:

Shri S.RAGHU, ADV 543,12th Cross,8th main,JP.Nagar,2nd Phase,Bangalore-560078. For the Appellant

Shri S. Teli, Deputy Commissioner(AR) For the Respondent

Date of Hearing: 10/03/2015

Date of Decision: 10/03/2015

CORAM:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20603 / 2015

Per : B.S.V. MURTHY

Appellant is engaged in providing event management service and when the proceedings were initiated for recovery of service tax, they paid the tax immediately and paid interest during the course of proceedings and paid the penalty of 25% of the tax demanded within 30 days from the date of OIO. The original adjudicating authority had taken the view that the penalty under Section 78 is sufficient and did not impose penalties under Sections 76 & 77. Revenue filed an appeal and the learned Commissioner(Appeals) has imposed penalty under Sections 76 & 77 and the appellant is before me contesting the penalties imposed on them as a result of the order passed by the learned Commissioner(Appeals).

2. Learned counsel cited several decisions in support of his submission to submit that once penalty imposed under Section 78, penalties under Sections 76 & 77 need not be imposed. In the case of Suganthi Travels [2011(22) STR 72 (Tri. Chennai)], it was held that penalties under Sections 76 & 78 are mutually exclusive. Therefore, penalty under Section 76 of Finance Act, 1994 cannot be upheld.

3. As regards penalty under Section 77 of Finance Act, 1994, the Commissioner has imposed only a penalty of Rs.1000/-. This had been waived by the original authority on the ground that once penalty is imposed under Section 78, the penalty for non-filing of returns and for late payment gets subsumed in the penalty imposed under Section 78 of the Finance Act. Penalty under Section 78 is imposed because of suppression or intention to evade payment of tax. When registration is itself not taken, obviously, the returns would not have been filed and procedure would not have been followed. Only when the service provider or a tax payer is registered, he would have followed procedure and he would have filed returns and failure would attract the penalty under Section 77 in addition to penalty under Section 76 also. For these reasons as well as the facts, in this case wherein it is seen that appellant has promptly paid tax and interest as also penalty since they did not want to contest the issue, it is felt that a lenient view is called for. Therefore in this case having regard to the facts and circumstances, the penalty under Section 77 is set aside.

(Order pronounced and dictated in open court)

B.S.V.MURTHY TECHNICAL MEMBER

Raja 2