Tribunal upholds decision on penalty under Finance Act 1994, dismisses appeal for tax evasion.

The Tribunal upheld the Commissioner's decision not to impose a penalty under section 78 of the Finance Act, 1994, based on the assessee's compliance with periodic filings and a pending appeal on a similar issue. The Revenue's appeal alleging suppression of facts to evade tax was dismissed, with the Tribunal finding no infirmity in the Commissioner's reasoning. The judgment was delivered on 17/11/2017 by S.S. Garg, Judicial Member of the Appellate Tribunal CESTAT Bangalore.

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Issues:
- Imposition of penalty under section 78 of Finance Act, 1994.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner (A) where no penalty was imposed on the respondent under section 78 of the Finance Act, 1994. The case involved the leasing out of land, building, and machinery by the assessee without paying the service tax on the entire value of taxable services received. The department issued show cause notices covering multiple periods, and penalties were imposed under sections 77(2) and 76 of the Finance Act, 1994. However, the Commissioner refrained from imposing a penalty under section 78. The appellant contended that the non-imposition of penalty under section 78 was not sustainable, alleging suppression of material facts to evade tax.

Upon review, the Tribunal found no infirmity in the Commissioner's decision not to impose a penalty under section 78. The Commissioner's reasoning was based on the assessee's periodic filing of returns and the pendency of an appeal on a similar issue from an earlier year. The Tribunal upheld the decision, stating that there was no suppression of facts, leading to the dismissal of the Revenue's appeal. The judgment was pronounced on 17/11/2017 by S.S Garg, Judicial Member of the Appellate Tribunal CESTAT Bangalore.

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