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of <h1>Tribunal sets aside penalty under Section 78, upholds penalty under Section 77. Appeal judgment on 31-1-2017.</h1> <h3>G.S. Caterers Versus CCE & ST, Jallandhar</h3> G.S. Caterers Versus CCE & ST, Jallandhar - TMI Issues: Appeal against penalties imposed under Sections 78 and 77 of the Finance Act, 1994 for failure to pay service tax and file returns.Analysis:1. Background: The appellants appealed against penalties imposed by the Commissioner of Service Tax for not paying service tax and not filing returns for the specified period.2. Penalty Imposition: The show cause notice proposed penalties under Sections 78 and 77 of the Act. The appellants contested the penalty under Section 78, arguing that demand determination under Section 73(2) is a prerequisite for imposing such a penalty.3. Legal Argument: The appellants, through their Chartered Accountant, argued that no demand was proposed in the notice, and no demand was confirmed in the Order-in-Original. They cited relevant case laws to support their stance.4. Tribunal's Decision: The Tribunal noted that the penalty under Section 78 requires prior determination of demand under Section 73(2) of the Act. Since demand determination did not occur in this case, the penalty under Section 78 was deemed unsustainable. The Tribunal referred to the judgment in Total Security System vs. CCE, Goa, highlighting the necessity of demand determination for imposing penalties.5. Outcome: The Tribunal set aside the penalty under Section 78 of the Finance Act, 1994, while upholding the penalty under Section 77. The appeal was disposed of accordingly, with the judgment pronounced on 31-1-2017.
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