Penalty - Case Laws

The penalty had been imposed under Rule 15(2) of CCR Rules, 2004 read with section 11AC of Central Excise Act, 1944. Rule 15(2) covered only input and capital goods during the relevant period. The appropriate section is rule 15(3) which covered input services and there is no mechanism to invoke section 11AC nor section 78 under this rule. The levy of penalty of ` 10,000/ was justified under the circumstances of the case. [Balrampur Chini Mills Ltd. vs. CCE (2013)30 STR 384 (Tri.-Del.)]

If the asseesee pays the service tax and interest before service of SCN, no SCN can be served on him. Penalty u/s. 76 is set aside. [MD Engineers vs. CCE (2013) 30 STR 389 (Tri.-Ahmd.)] [Section 73(3) & Para 9.1 of Master Circular No. 97/8/2007-ST, dated 23-8-2007]

The appellant having not registered with the service tax department paid the service tax along with interest on being pointed out by the department. The appellant being a small taxpayer was not aware of the provisions of the service tax law, the service tax being a new levy of tax, after taking a lenient view and giving the benefit of section 80 penalty demand has been waived. [Prince Thermal India Pvt. Ltd. vs. CCE (2013) 30 STR 394 (Tri.- Mum.)]

As soon as the assessee was informed that the credit taken in respect of services provided prior to 10-9-2004 is not admissible, they paid the service tax along with interest even prior to the issuance of SCN. There was no suppression or fraud or misdeclaration of facts since there is no dispute about the payment of service tax by the service provider and receiver and credit was take on proper documents. [Astral Pharma Ltd. vs. CCE, Vadodara (2013) 30 STR 397 (Tri.-Ahmd.)]

The service tax levy on GTA service was introduced from 1-1-2005 and the appellant was not aware of their service tax liability. Moreover the appellants paid the service tax and interest on being pointed out by the department. Section 73(3) of the Finance Act is applicable as there is no suppression, collusion, wilful misstatement or fraud on the part of the appellant and in that circumstances benefit of section 80 is to be given to the appellant. [Phoenix Engineering vs. CCE (2013) 30 STR 399 (Tri.-Chennai)]

Once penalty under section 78 is imposed there is no justification for imposing separate penalty under section 76 [CCE vs. Merino Industries Ltd. (2013) 30 STR 413(Tri.-Del.) relying on CCE vs. City Motors 2010(19) STR 486]

The appellant could not take registration and pay the Service Tax under bona fide belief that due to changes introduced in the Management, Maintenance and Repair Service and Erection, Commissioning and Installation service from time to time. However on being pointed out appellants obtained the Service Tax Registration and paid the dues. Penalty u/s. 76 is not imposable in view of the provisions of section 80. [NI Associates vs. CST (2013) 30 STR 416(Tri.-Mum.)]

The appellants were providing Manpower Recruitment or Supply Agency service and had not paid service tax during the period June 2005 to June 2009. The service tax liability on the Manpower Supply services was introduced w.e.f. 16/6/2005. The definition of Manpower Supply service has undergone change twice. All these confusions may have created a situation wherein the assesee may not be aware of exact service tax liability. Hence it is a fit case for invoking section 80. Penalty set aside. [Jashbhai vs. CCE (2013) (30) STR 444(Tri.-Ahmd.)]