No justification for imposition of penalty under Section 77 and 78 of the Finance Act, 1994 when penalty under Section 76 thereof was waived on the ground of reasonable cause
In the instant case, Garodia Special Steels Ltd. (the Appellant) paid Service tax under the category of Goods Transport Agency on Reverse Charge basis. However, during the audit of their unit, the reconciliation of ledger accounts with the Service Tax Returns revealed that the Appellant had not paid the Service tax during the periods 2007-2008 and April 2008 to December 2009. The Appellant paid the entire amount of Service tax before the issuance of Show Cause Notice.
Nonetheless proceedings were initiated and apart from upholding the Service tax demand, penalties were imposed under Sections 77 and 78 of the Finance Act, 1994 (the Finance Act) along with interest. However, the Adjudicating Authority waived off the penalty under Section 76 of the Finance Act on the ground of reasonable cause. On appeal being filed to the Commissioner (Appeals) against imposition of penalty, the same was rejected. Being aggrieved, the Appellant filed an appeal before the Hon’ble CESTAT, Mumbai.
The Hon’ble CESTAT, Mumbai while setting aside the penalties imposed under Section 77 and 78 of the Finance Act held as under:
- Detection of non-payment of Service tax from the books of accounts maintained by the Appellant, indicates that the Appellant could not have any mala fide intention to evade payment of Service tax;
- The Adjudicating Authority waived penalty under Section 76 of the Finance Act by taking cover of Section 80 thereof. Having found reasonable cause for waiving penalty under Section 76 of the Finance Act, there is no justification for imposing penalty under Section 77 and Section 78 thereof.
Therefore, the penalties imposed upon the Appellant were set aside.
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respected sir.
if the service tax paid in vces scheme what was declared but some amount in interest forget to pay weather i can avail the vces scheme or not and if not then what is the progedure for it