2015 (8) TMI 795

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....iled pay service tax on the amount collected from their clients. Offence case was registered by Preventive Unit of Coimbatore Commissionerate and after completing investigation a show cause notice dated 27.02.2008 was issued to the appellant for demanding service tax of Rs. 5,91,192/- for the period 01.04.06 to 31.12.06 not paid under Construction of Residential Complexes. Appellants collected the entire amount and failed to remit the service tax to the Govt. account. The adjudicating authority in his order dated 30.12.2008 confirmed the demand and also appropriated an amount of Rs. 5,99,954/- towards service tax and educational cess and interest and imposed penalty under Section 76, 77 and equal penalty under Section 78 of the Finance Act,....

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....struction service. But for the detection by the Department the service tax evasion could not have been noticed as the appellants not taken any registration under service tax nor discharged any service tax. He further submits that the Commissioner (Appeals) has already waived the penalties under Section 76 & 77 under Section 80. He relied upon the following decisions of the Mumbai Bench in the case of Kedia Business Centre Vs. CCE, Mumbai - 2009 (15) STR 550 (Tri.- Mum.) and Riya Travels & Tours (I) Pvt. Ltd. Vs. UOI - 2011 (24) STR 544 (Bom.). 6. I have carefully examined the submissions of both sides. The present appeal is limited to only waiver of equivalent penalty imposed under Section 78 of the Act. It is the case where the appellan....

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.... appellant under any of the above provisions. In this connection, he has relied on the Bombay High Court's decision in CCE v. Gaurav Mercantiles Ltd. - 2005 (190) E.L.T. 11 (Bom.) and a plethora of orders by this Tribunal. The Hon'ble High Court held that where the entire duty liability was discharged prior to issuance of show-cause notice, no penalty was to be imposed on the assessee under Section 11AC of the Central Excise Act. Some of the decisions of the Tribunal cited by the counsel are also to the same effect. A few decisions of the Tribunal are to the effect that any penalty under Sections 76/77/78 of the Finance Act, 1994 is not imposable on a service-provider who paid service tax prior to issue of show-cause notice. The lea....

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....y the assessee prior to issuance of show-cause notice. I am of the considered view that this principle is applicable to the penalty under Section 78 of the Finance Act, 1994 inasmuch as both these provisions of law (Section 11AC of the Central Excise Act and Section 78 of the Finance Act, 1994) deal with penal liability of an assessee who has failed to discharge tax liability in comparable circumstances. However, I am not inclined to apply the above principle to the penalties under Section 76 and 77 of the Finance Act, 1994. Insofar as those penalties are concerned, some of the decisions cited by the learned counsel are found to be operating in favour of the appellant. In the case of Sieger Spintech Equipments Pvt. Ltd. v. CCE, Coimbatore -....