2014 (11) TMI 714

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....osed any penalty under Sections 76 and 78 of the Finance Act, 1994. Revenue filed appeal against the adjudication order by challenging the portion whereby the adjudicating authority had not imposed any penalty. 3. The contention of the Revenue is as under:     (i) As per Section 67 of the Finance Act, 1994 the service tax is to be paid on the gross amount charged by the service provider. Section 68 of the Act states that every person providing taxable service to any person shall pay service tax at the rate specified in Section 6 in such manner and within such period as may be prescribed.     (ii) As per Section 77 of the Act, whoever contravenes any of the provisions of this Chapter or any rule made there un....

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.....96 (para 4 of the SCN refers) wherein it is mentioned that they had taken up the issue of payment of service tax on the total amount billed with M/s. SCI and M/s. Essar. Thus, it clearly shows that the knowledge of the assessee about the appropriate liability and the mens-rea stands established on their part. In such situation imposition of penalty is mandatory.     (vii) The other reason advanced by the adjudicating authority for non-imposition of penalty was the fact of payment of service tax due, along with interest by the assesee prior to the issuance of the Show Cause Notice. This issue stands settled by the decision of the Punjab & Haryana High Court in the case of Commissioner of Central Excise, Delhi-III vs. Machino....

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....mbursement by the service recipient in respect of salaries and wages etc is not to be considered as part of taxable service for payment of service tax. When the Revenue pointed out the same the respondents pursued the matter with the service recipient and paid the service tax with interest. The Respondents relied upon the provisions of Section 80 of the Finance Act, 1994 to submit that as the period in dispute is initial period when the levy was imposed in respect of activity undertaken by the respondent and bona fide believed that the receipt in respect of wages and salaries etc is not to be taken into consideration for payment of service tax. Hence the respondents are not liable to any penalty. 6. We find that in this case the dispute is....