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of <h1>Tribunal waives penalties in rent-a-cab service tax appeal</h1> <h3>ASTAVINAYAK TRAVELS Versus COMMISSIONER OF CENTRAL EXCISE, NAGPUR</h3> ASTAVINAYAK TRAVELS Versus COMMISSIONER OF CENTRAL EXCISE, NAGPUR - TMI Issues:Appeal against penalty under Section 76 & 78 of the Finance Act, 1994 for plying taxi on kilometre basis under rent-a-cab service.Analysis:The appellant, engaged in plying taxis on a kilometre basis, appealed against the penalty imposed under Section 76 & 78 of the Finance Act, 1994. The appellant believed that running taxis on a kilometre basis did not fall under rent-a-cab service and thus did not pay service tax initially. However, after a show-cause notice, they paid the service tax along with interest. Another show-cause notice was issued later, demanding service tax for a specific period, which was adjudicated resulting in the confirmation of service tax demand along with interest and penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant challenged the imposition of penalties under Section 76 & 78 of the Finance Act, 1994.The counsel argued that the issue of plying taxis on a kilometre basis being covered under rent-a-cab service was settled by the Hon'ble High Court of Punjab & Haryana in a previous case. Referring to this precedent, the counsel contended that penalties should not be imposed. The counsel requested the waiver of penalties under Section 76 & 78 of the Finance Act, 1994 based on these legal precedents.The Tribunal considered the submissions and noted that although the demand for service tax was confirmed using the extended period of limitation, the appellant did not dispute the demand or the payment of interest. The Tribunal clarified that it was only addressing the penalty issue as requested by the appellant. Given the disputed nature of the activity during the relevant period and in line with the decision of the Hon'ble Gujarat High Court, the Tribunal set aside the imposition of penalties under Section 76 and 78 of the Finance Act, 1994.In conclusion, the appeal was disposed of with the penalties under Section 76 & 78 of the Finance Act, 1994 being waived based on the legal interpretation and precedents cited during the proceedings.
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