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of <h1>CESTAT Upheld Service Tax Demand for Mandap Keeper & Business Auxiliary Services</h1> The Appellate Tribunal CESTAT, Ahmedabad confirmed a service tax demand of Rs. 1,83,799 against the appellant for short payment of service tax related to ... Demand - No one has appeared on behalf of the appellant - It was submitted that penalty under Section 78 may be reduced to 25% which has already been paid by them and penalty imposed under Section 76 of the Finance Act, 1994 may be set aside - The reason given by the appellant is that the party plot is not used on a regular basis and the order in original was received by the watchman and it was handed over to them late and they have paid the amount within thirty days of the actual receipt not acceptable - Therefore the request for reduction of penalty to the extent of 25% of the service tax has to be rejected Penalty u/s 76 - if offences are committed in course of same transaction or arise out of same act, penalty imposable for ingredients of both the offences - No reasonable cause as required under Section 80 of Finance Act, 1994 has been shown - appeal has no merit and accordingly the same is rejected Issues:1. Short payment of service tax by the appellant for providing mandap keeper service.2. Commission received by the appellant for business auxiliary services.3. Imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994.Issue 1: Short payment of service tax for providing mandap keeper serviceThe appellant was found to be renting a party plot and charging customers for functions, leading to a shortfall in service tax payment of Rs. 1,43,300 from 2002-2003 to 2006-2007. Additionally, the appellant received commission from decorators, which was deemed as business auxiliary services, resulting in a service tax liability of Rs. 40,499 for the period from 1-7-03 to 31-3-07. After adjudication, a service tax demand of Rs. 1,83,799 was confirmed along with penalties under Section 76 and Section 78 of the Finance Act, 1994.Issue 2: Commission received by the appellant for business auxiliary servicesThe appellant did not contest the service tax demand and interest but sought a reduction in penalties. The appellant requested a penalty reduction to 25% under Section 78, which was already paid, and the setting aside of the penalty under Section 76. However, it was noted that the penalty was not paid within thirty days of the order issuance, despite the original authority's indication of a reduced penalty if paid promptly. The appellant's delay in payment was attributed to receiving the order late due to the party plot's irregular use, but the Tribunal held that statutory payment timelines could not be condoned.Issue 3: Imposition of penalties under Section 76 and Section 78Regarding the penalty under Section 76, the appellant argued against the imposition of penalties under both sections, citing a High Court decision that penalties for distinct offenses must be imposed separately. As no reasonable cause under Section 80 of the Finance Act, 1994 was shown, the Tribunal rejected the appeal, upholding the penalties under both Section 76 and Section 78. The judgment was pronounced on 24-12-2010 by the Appellate Tribunal CESTAT, Ahmedabad.
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