Tribunal dismisses Revenue's appeal, upholds credit for input services, and rules out penalty under Section 76.

The Tribunal dismissed the Revenue's appeal against demand confirmation of Rs. 62,78,488/- with interest, as it found no non-payment of Service Tax and upheld the right of branch offices to avail credit for input services. Additionally, the Tribunal ruled that the penalty under Section 76 of the Finance Act was not applicable since there was no failure to pay Service Tax, ultimately dismissing the appeal on this issue as well.

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Issues involved: Appeal against demand confirmation, Penalty under Section 76 of the Finance Act.

Appeal against demand confirmation: The Revenue filed an appeal against the impugned order confirming a demand of Rs. 62,78,488/- with interest. The adjudicating authority did not impose any penalty under Section 76 of the Finance Act. The case revolved around service providers under the category of Advertising Agency who availed credit for input services received at branch offices. The Revenue argued that since the head office was not registered with the Revenue and did not obtain centralized registration, the credit was wrongly availed. However, the Tribunal found that there was no case of non-payment of Service Tax. It was noted that if the head office wrongly availed credit for services related to branch offices, the branch offices were legally entitled to take credit. Consequently, the Tribunal dismissed the appeal against the demand confirmation.

Penalty under Section 76 of the Finance Act: Section 76 of the Finance Act stipulates that any person liable to pay Service Tax, who fails to pay such tax, shall pay a penalty not less than Rs. 100/- for every day of such failure. In this case, the Revenue contended that since the respondents wrongly availed credit, they were liable for penalty under Section 76. However, the Tribunal held that as there was no failure to pay Service Tax, the penalty under Section 76 was not applicable. The Tribunal found no infirmity in the impugned order and consequently dismissed the appeal on this issue as well.

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