Appeal partly allowed, penalty revised under section 78 for GTA services, section 77 penalty sustained.

The Tribunal partly allowed the appeal, setting aside the penalty amount already paid before the notice and revising the penalty under section 78 to the amount of service tax short paid for GTA services. The penalty under section 77 was sustained, without affecting the confirmed demand or interest.

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Issues:
1. Service tax liability on GTA services and BAS services.
2. Penalty imposed on the appellant.

Analysis:
1. The appellants, engaged in manufacturing photovoltaic cell modules, were investigated for not discharging their service tax liability on GTA services and commission paid to foreign service providers under the reverse charge mechanism. A Show Cause Notice was issued proposing recovery of service tax amounts. The original authority confirmed the demand and imposed penalties. The appellants appealed, contesting only the penalty imposed. They had paid the entire service tax for BAS services before the notice and a portion for GTA services. The appellant argued that the uncertainty regarding service tax liability during the relevant period should be considered for penalty reduction. The AR reiterated the findings of the impugned order.

2. The Tribunal noted that the appellants had paid the entire service tax for BAS services and a portion for GTA services before the show cause notice. A small amount remained unpaid for GTA services. The Tribunal found the confirmation of the entire demand and equal penalty unjustified. The penalty amount paid before the notice was set aside, and the penalty under section 78 was revised to the amount of service tax short paid for GTA services. The penalty under section 77 was sustained. The appeal was partly allowed without affecting the confirmed demand or interest.

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