Tribunal confirms service tax demand at Rs.96,80,867, waives penalty for no tax evasion or facts suppression.

The Tribunal upheld the confirmation of service tax demand at Rs.96,80,867/- as per the Show Cause Notice, rejecting the higher amount confirmed by the adjudicating authority. The penalty under Section 78 of the Finance Act, 1994 was waived as the Appellant demonstrated no intention to evade tax and no suppression of facts. The demand for service tax with interest was upheld, while the penalty was set aside.

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Issues involved:
The issues involved in the judgment are confirmation of service tax demand exceeding the amount mentioned in the Show Cause Notice and imposition of penalty under Section 78 of the Finance Act, 1994.

Confirmation of Service Tax Demand:
The Appellant, engaged in Cargo Handling Service, was issued a Show Cause Notice for non-payment of service tax during the Financial Year 2009-10. The Notice demanded an amount of Rs.96,80,867/-, but the adjudicating authority confirmed a higher amount of Rs.1,08,13,836/-. The Appellant argued that the law does not allow confirmation of any amount beyond the demand in the Notice, citing Section 73(2) of the Finance Act, 1994. The Appellant's submission was that the excess liability was not disputed and was admitted by them. However, the Tribunal held that the confirmation of duty in excess of the demand made in the notice is not sustainable. Therefore, the confirmation of Service Tax of Rs.96,80,867/- as demanded in the Notice was upheld.

Imposition of Penalty:
The Appellant contested the penalty equal to the service tax imposed under Section 78 of the Finance Act, 1994. They argued that there was no intention to evade payment of service tax, as they voluntarily declared a higher liability than demanded in the Notice. The Appellant also highlighted that there was no allegation of suppression of fact to evade tax in the Show Cause Notice. The Tribunal found merit in the Appellant's submissions and observed that suppression of fact with an intention to evade payment of tax was not established. Consequently, the provisions of Section 80 of the Finance Act, 1994 were invoked to waive the penalty. The demand of service tax of Rs.96,80,867/- along with interest was upheld, while the penalty under Section 78 was set aside. The appeal was disposed of accordingly.

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