Case Law Details
Bharat Aluminium Company Limited Vs Commissioner (CESTAT Delhi)
CESTAT Delhi held that imposition of penalty under section 78 of the Finance Act without elements of fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules made thereunder with an intent to evade payment of tax is untenable in law.
Facts- The appellant is registered with the Central Excise and holds the service tax registration for providing services of consulting engineers, business auxiliary, manpower recruitment or supply, goods transport agency, etc. Its records were audited by the Accountant General of Chhattisgarh, Raipur and it was felt that the appellant had short paid service tax to the extent of Rs. 72,33,994/- during the year 2008-2009 in respect of services received by it from foreign companies in the capacity of recipient of services.
Accordingly, a show cause notice was issued to the appellant demanding service tax of Rs. 3,31,55,802/- under the proviso to section 73 (1) of the Finance Act, 1994 along with interest u/s. 75. Penalties were proposed to be imposed u/s. 77 and 78 of the Finance Act. Principal Commissioner passed the impugned order confirming demand of service tax of Rs. 15,69,570/- along with interest. He dropped the remaining demand of Rs. 3,15,86,232/-. He also imposed penalty of Rs. 10,000/- upon the appellant u/s. 77 of the Finance Act for failing to file the proper return and the penalty of Rs. 15,69,570/- u/s. 78 for intentional evasion of service tax by deliberately suppressing facts from the department. Being aggrieved, the present appeal is filed.
Conclusion- It is undisputed that the services rendered by an employee to its employer are out of the ambit of service tax. The demand of service tax, therefore, needs to be set aside to the extent of Rs. 9,45,494/- on this count.
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