TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 1289
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....of the Appellant submits that both the lower authorities have erred to confirm penalties under Section 76 and Section 78 of the Finance Act whereas simultaneously penalties cannot be so imposed. He submits that the entire amount of service tax along with interest was duly paid and deposited during the investigation stage itself as there was confusion about the levy of service tax on foreign commission paid at the relevant period. That the Appellant being under confusion and bonafide belief whether such tax is payable or not did not have any guilty intention and mens rea to avoid payment of tax that they have immediately paid tax along with interest as soon as they were intimated by the Department for the same therefore it was wrongly alleged by the department that there was malafide intention on behalf of the Appellant to evade payment of tax. 3. Shri Anoop K. Mudval, Learned Superintendent AR appearing on behalf of the Department reiterates findings of the impugned order. 4. We have heard both the sides and perused the records. We find that the present appeal is directed against imposition of penalty under section 76 and 78 of the Finance Act, 1994 only. We observe that there is....
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....ty per cent of the service tax payable. This Section 76 of the Finance Act, 1994, has been substantially amended with effect from 14.05.2015 to which we would make a reference at later stage. 9. It can thus be seen that at the relevant time Section 78 of the Finance Act, 1994, provided for penalty in cases of tax not being levied or paid, or short-levied or short-paid or erroneously refunded, by reason of fraud or collusion or willful mis-statement etc., whereas Section 76 covered the cases of non-payment of tax on any ground whatsoever. The penalty that authority could impose under Section 78 is hundred per cent of the amount of the service tax evaded. On the other hand, the penalty under Section 76 which could be imposed is at the fixed amount per day for the entire duration of the failure to deposit the tax which, in any case, would not exceed fifty percent of the service tax payable. 10. The tenor, background and the purpose for which the penalty could be imposed under Section 78 of the Finance Act, 1994, is entirely different than in case of Section 76 of the Finance Act, 1994. However, the language of Section 76 did not specifically exclude the situation; otherwise cove....
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....so be liable to pay penalty not exceeding ten per cent of the amount of such service tax. Thus, by way of this amendment, the statute has ensured that Sections 76 and 78 of the Finance Act, 1994, apply in mutually exclusive areas. In other words, the cases of nonpayment of tax by reason of fraud or collusion or willful misstatement or suppression of facts etc., would be covered under Section 78 of the Finance Act, 1994, and all cases other than those envisaged under Section 78 would be covered under Section 76 of the Finance Act, 1994. 13. The view taken by us is supported by the judgment of Punjab and Haryana High Court in the case of Commissioner of Central Excise Vs. First Flight Courier Limited [ 2011(22) S.T.R. 622 (P&H) = 2011-TIOL-67-HC-P&H-ST in which in para 4 and 5 it was held and observed as under: "4. Only point which has been urged by learned counsel for the appellant is that after 10-05-2008, there is an amendment providing that penalty under Section 76 could not be levied if penalty under Section 78 has been levied but for the period prior thereto, penalty could be levied under both Sections. The Commissioner (Appeals) as well as the Tribunal erred in deleting ....
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.... beneficial to the assessee which is to be preferred. That is what has been done by the Tribunal as well as by this Court. Therefore, it is not possible to accept the contention of the revenue that less than one hundred rupees has to be considered as less than one hundred rupees for everyday. 18. Probably, noticing this loophole, the Legislature taking note of the judicial pronouncement, from 1842006 amended the law so as to include `every day' after the words one hundred rupees. Therefore, till such amendment, the interpretation placed by the Judicial authorities has been accepted by the Government. That is the cause for amendment. Therefore, the minimum penalty leviable under Section 76 is one hundred rupees and the maximum penalty leviable is two hundred rupees per day, during the relevant period. However, the same is subject to the condition stipulated in the said section that he has failed to pay service tax. Therefore, discretion is left to the authority to prescribe the measure of penalty between these two stipulations. 19. If it is a failure to comply with the requirement of Section 78, a separate penalty is stipulated in the said provision. Section 78 applies to a ca....