TaxTMI 
TaxTMI 
2023 (6) TMI 470
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....ST/537/2011) and M/s G.D. Tools and Forgings (ST/538/2011) are engaged in manufacture and exports of leather tool bags and polyester bags. Both the appellants have been paying the overseas commission at an agreed percentage of business generated by them to their overseas commission agents who helped them to find customers abroad. It appeared to the Department, in case of M/s Lakshya International Private Limited (ST/537/2011), that the appellants were rendering "Business Auxiliary Service" as per Section 65(19) as a commission agent; as the commission agents are located outside India, the appellants, as receivers of the service are liable to pay service tax under Reverse Charge Mechanism in terms of Rule 2 (1) (d) (iv) of the Service Tax Ru....
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....7 and refrained from imposing penalty under Section 76. On appeals filed by the appellant and the Department (for not imposing penalty under both Sections 76 & 78), Commissioner (Appeals) set aside the demand of service tax of Rs.1,12,100/- for the period 09.07.2004 to 17.04.2006; confirmed balance service tax of Rs.1,08,790/- for the period 18.04.2006 to 30.09.2008; upheld the penalty under Section 77 and reduce the penalty under Section 78 to Rs.1,08,790/- 3. Shri Sudhir Malhotra, learned counsel, submits that the issue involved in both the appeals is identical and therefore, the same may be heard and decided together. Accordingly, both the appeals have been heard together and have been taken up for decision. 4. Shri Sudhir Malhotra....
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....(7) STR 230 (Tri. Bang.) (vi) ChiripalPolyfilms Ltd.- 2022 (67) GSTL 454 (T) Penalty under Section 76 and Section 78 cannot be imposed together as held by Hon'ble Punjab & Haryana High Court in the case of Pannu Property Dealers, Ludhiana- 2011 (24) STR 173 (P&H) and in other cases. Penalty cannot be imposed when the issue relates to interpretation of law as held in Kathuria Portfolios- 2003 (158) ELT 355 (T) and A.G. Shibu &Anothers- 2008 (10) STR 317 (T). Also, Section 80 of Finance Act, 1994 provides that penalty may not be imposed when reasonable cause is shown for failure to pay service tax. 5. Ms. Shivani, learned Authorized Representative for the Department submits that the appellants cannot take the ple....
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....l Authority observes as follows: "As regards the defence put up by the Noticee against the issue of imposition of penalty, including the extended period of limitation, under the provisions invoked in the show cause notice, I am not convinced by their plea. Mere recording of the transactions in their record will not suffice. It is not the Noticee's case that they have ever brought the matter in the knowledge of the Department. It was only when the Department had initiated the investigation based on information received from outside that the Noticee disclosed the act of receiving the taxable services and the details thereof. The Noticee neither obtained registration nor filed any returns containing the requisite information. As such,....
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....scussed at all the Chartered Accountant certificates. They have not also contradicted the said certificates. We are of the considered opinion that certificates given by Experts in the respective fields cannot be ignored without cogent reasons. Therefore, we find that the duty has been correctly paid by the appellants. 8. The appellants have taken the plea that in the case of G.D. Tools and Forgings, applicable service tax has been paid along with interest before the issuance of show cause notice; in case of Lakshay International, service tax along with interest and in addition25% of the penalty has been paid. Therefore, we find that the appellants have made out a case under the provisions of Section 73and Section 80 of the Finance Act, 1....