Tribunal Modifies Orders for Abatement Benefits and Penalty Removal under Finance Act

The Tribunal modified the orders to allow abatement benefits to the applicant and set aside penalties under Section 78, following the High Court's decision emphasizing conditions for imposing penalties under the Finance Act, 1994. The judgment served as a corrigendum to the previous decision, addressing errors in considering abatement entitlement and adopting the High Court decision's ratio.

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Issues:
Challenging orders holding liable for outdoor catering service tax, abatement entitlement consideration, adoption of High Court decision ratio, penalty under Section 78 justification.

Analysis:
1. The case involved a challenge against orders holding the applicant liable for tax on outdoor catering services as per the Finance Act, 1994. The Tribunal rejected the appeals, prompting the applicant to seek rectification under section 35C of the Central Excise Act, 1944, citing two errors apparent on the record.

2. During the hearing, the Learned Counsel argued that the applicant was entitled to abatement as per notification no. 1/2006-ST dated 1st March 2006, which was not considered in the impugned orders. The Tribunal had netted demands for a specific period after abatement but failed to do so for the earlier period, leading to the request for a review.

3. The Learned Counsel contended that the Tribunal did not consider their plea to adopt the ratio of a decision by the Hon'ble High Court of Allahabad, which was crucial in determining the liability. The order did not record this submission, although it was referred to in upholding the levy against the applicant.

4. The judgment referred to a case involving the Indian Coffee Workers Co-op Society Ltd, where the High Court set aside penalties under Section 78 of the Finance Act, 1994, emphasizing the conditions required for imposing such penalties. The Court highlighted that penalties should be based on fraud, collusion, willful misstatement, suppression of facts, or contravention with intent to evade payment of service tax.

5. Considering the circumstances and the High Court's decision, the Tribunal modified the impugned orders to allow the benefit of abatement to the applicant and set aside any penalties under Section 78. The order served as a corrigendum to the previous decision and was pronounced in court on 07/06/2018.

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