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of <h1>Tribunal Upholds Penalties Under Finance Act Sections 77 & 78, Dismisses Appeal for Additional Penalty</h1> <h3>Commissioner of Service Tax, Kolkata Versus M/s. Ismart BPO Services Pvt. Ltd.</h3> Commissioner of Service Tax, Kolkata Versus M/s. Ismart BPO Services Pvt. Ltd. - TMI Issues:1. Imposition of penalties under different sections of the Finance Act, 1994.Analysis:The case involved a dispute regarding the non-inclusion of the full consideration received by the respondent while making payment of service tax for services classified under 'Business Auxiliary Service.' The Department issued a Show Cause Notice proposing to include the full value of consideration received by the appellant. The Adjudicating Authority upheld the demand for service tax, interest under Section 75, and imposed penalties under sections 77 and 78 of the Finance Act, 1994. However, the Authority refrained from imposing a penalty under section 76. The Revenue appealed, seeking the imposition of a penalty under section 76 in addition to the other penalties.During the appeal, the Revenue was represented, but no one appeared on behalf of the respondent, despite multiple hearing dates. The Revenue argued that both penalties under Sections 76 and 78 should be imposed as a proviso under Section 78, introduced from 10.05.2008, stated that if a penalty is payable under this Section, the provisions of Section 76 shall not apply.After hearing the arguments and examining the records, the Tribunal noted that the Adjudicating Authority had confirmed the demand for differential duty and imposed penalties under Sections 77 and 78. The Revenue contended that a penalty should also be imposed under Section 76. The Tribunal analyzed both sections and observed that Section 76 deals with penalties for failure to pay service tax, while Section 78 pertains to penalties for non-payment due to fraud, etc. As the demand was upheld based on alleged suppression of facts, the Tribunal found the penalty under Section 78 to be justified and saw no reason to impose an additional penalty under Section 76.Consequently, the Tribunal dismissed the appeal of the Revenue, stating that there was no justification for the grounds raised in the appeal. The judgment was dictated and pronounced in open court by the Tribunal.
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