Tribunal upholds penalty for late service tax payment, considers cum tax, no evasion found.

The Tribunal upheld the penalty under Section 76 of the Finance Act, 1994, against the appellant for failing to pay service tax on time. The consideration received was treated as cum tax, reducing the tax liability. The Commissioner's order setting aside penalties under Sections 77 & 78 was not revisited, but the penalty under Section 76 was upheld as there was no intention to evade service tax. The appellant's appeal was disposed of, affirming the imposition of the penalty under Section 76 within prescribed limits.

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Issues:
1. Service tax liability on franchisee service and business auxiliary service.
2. Imposition of penalties under Sections 77, 78, and 76 of the Finance Act, 1994.
3. Review of the order passed by the lower adjudicating authority.
4. Consideration received for services rendered as cum tax and deduction towards service tax liability.

Analysis:
1. The appellant was issued a show-cause notice for service tax amounting to Rs. 4,64,524/- for franchisee service and business auxiliary service. The Assistant Commissioner imposed penalties under Sections 77 & 78, which were later set aside by the Commissioner (Appeals). However, the Commissioner's order did not address the request for considering the consideration received as cum tax. A subsequent notice confirmed the service tax demand and imposed a penalty under Section 76, leading to the current appeal.

2. The appellant argued that the Commissioner was barred from revising the matter while pending with the Commissioner (Appeals). The appellant contended that the penalty under Section 76 was harsh as there was no intention to evade service tax. The Revenue supported the adjudicating authority's findings.

3. The Tribunal found merit in treating the consideration received as cum tax, reducing the tax liability to Rs. 4,16,775/-. The appellant was entitled to relief in this regard. Regarding the penalty under Section 76, it was noted that the Commissioner (Appeals) did not address this issue, allowing the Commissioner of Service Tax to review and impose the penalty. The Tribunal distinguished previous cases cited by the appellant, upholding the penalty under Section 76 based on failure to pay service tax in time.

4. The Tribunal referenced a High Court decision on penalties under Sections 76 and 78, emphasizing the distinct nature of the offenses and penalties. It was concluded that the appellant was liable for the penalty under Section 76 for failing to pay service tax on time. The penalty imposed under Section 76 was upheld within the prescribed limits. The appeal was disposed of accordingly.

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