Penalty liability under the pre-amendment taxable service definition was remanded for fresh adjudication after hearing the assessee.

Penalty under Sections 76 and 77 was examined in light of the pre-16.06.2005 scope of the taxable service, where the relevant definition had applied to a commercial concern and was later substituted by "any person". Because the lower authority had not properly considered whether the pre-amendment delay in filing returns and paying service tax attracted penalty, the penalty order was set aside and the issue was remanded for fresh adjudication after hearing the assessee.

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Issues: Whether penalties imposed under Sections 76 and 77 of the Finance Act were sustainable for the period prior to 16.06.2005, when the definition of the taxable service was amended; and whether the matter required reconsideration by the adjudicating authority.

Analysis: The appellant's case was that, before 16.06.2005, the levy applied to a commercial concern, whereas the appellant was an individual providing labour services and the expression was substituted by "any person" only from that date. It was also noticed that the question whether delay in filing returns and payment of service tax for the pre-amendment period could attract penalty had not been properly examined by the lower authority. The matter, therefore, called for fresh consideration after giving an opportunity of hearing.

Conclusion: The penalty order was set aside and the matter was remanded for fresh adjudication on the penalty issue after hearing the appellant.

Final Conclusion: The appellant obtained relief against the existing penalty order, but the question of penalty liability was left open for a de novo decision by the adjudicating authority.

Ratio Decidendi: Where the applicability of penalty depends on a statutory amendment affecting the scope of the taxable service for the relevant period, and that question has not been properly examined, the matter may be remanded for fresh decision after hearing the assessee.

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