2016 (12) TMI 1466 - AT - Service Tax

Appeal on Finance Act penalties resolved: Section 78 penalty dismissed, Section 77 penalty upheld

The appeal by M/s Shryas Intermediates Ltd. regarding the penalty under Sections 77 and 78 of the Finance Act, 1994 was disposed of. The court decided not ... Imposition of penalty u/s 77 and 78 of the FA, 199 - GTA services - failure to discharge tax - Held that: - the appellants have taken a credit of the Service Tax voluntarily paid by them on the Goods Transport Agency services. It is a revenue neutral situation. There is no specific evidence produced by revenue to allege suppression or the mis-representation on part of the appellant as apparently they have nothing to gain by avoiding or by evading this duty. In view of the above, penalty under Section 78 cannot be upheld - However, the appellant had not disclosed the value of transportation in their ST-3 returns and when the same was pointed out by the Revenue, they paid voluntarily. In view of the above, the penalty imposed under Section 77 is upheld - appeal allowed - decided partly in favor of appellant. The appellant failed to pay Service Tax on Goods Transport Agency services for specified periods (1.4.2007-31.3.2011 for the EOU unit and 1.4.2007-31.3.2012 for the DTA unit); a show-cause notice followed and the appellant paid duty and interest but contested penalties under Sections 77 and 78 of the Finance Act, 1994. The record shows the appellant 'have availed the credit of the Service Tax so paid,' confirmed by the jurisdictional officer, creating a 'revenue neutral situation.' No specific evidence was produced to establish suppression or misrepresentation or an intent to evade duty; consequently, 'penalty under Section 78 cannot be upheld.' However, the appellant had failed to disclose transportation value in their ST-3 returns and only paid when pointed out by Revenue; on that basis the penalty under Section 77 is upheld. Appeals disposed accordingly.