2018 (7) TMI 1678 – DELHI HIGH COURT – TMI – Simultaneous penalties u/s 76 and 78 – Commercial coaching and training services – case of Revenue is that the assessee was aware about its service tax liability; despite this knowledge, it filed its returns claiming that no liabilities were attracted – Held that:- The appellant, when it smelt investigation and adverse orders, it apparently approached the service tax authorities and deposited the amounts which they were admittedly liable to pay. Such being the case of foreknowledge, in the opinion of the court, itself is an important factor that ought to have been and was taken into account by the lower revenue authorities. Hence, foreknowledge lead to the imposition of recovery of dues assessed as well as imposition of the penalty under Section 78 – penalty u/s 78 upheld.
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Penalty u/s 76 – effect of amendment, retrospective or prospective? – Held that:- The appellant’s contention with respect to retrospective effect of the amendment o
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in providing commercial coaching and training services and therefore, he is subject to service tax levy under the Finance Act, 1994. It was registered as a service tax assessee and it appears to have not paid up his liability for the period 09.09.2004 to 31.03.2008, however, he filed its returns stating that there was no service tax liability. The Income Tax Search and Seizure proceedings apparently triggered investigations by the Service Tax Authorities. The Assesssee in these circumstances offered to pay service tax dues and filed returns on 02.03.2009. In the meanwhile, a show cause notice was issued on 23.06.2009. For a later period, the assessee again approached the Service Tax Authorities, conceding its liability and offering to pay up its dues. The show cause notice culminated in order in original dated 06.01.2012. Besides the tax liability, the Learned Commissioner (Adjudication), who adjudicated show cause notice, ordered, imposing penalties. The relevant part of the extract o
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ove amounts is also chargeable from them under Section 75 of the Act on the aforesaid amount till the date of payment of the service tax; v. I confirm the demand of service tax amounting to ₹ 4,64,867/- (Rupees four lakh sixty four thousand eight hundred sixty seven only) against the assessee i.e. M/s. N&N Chopra Consultant Pvt. Ltd. on the value of taxable service amounting to ₹ 43,53,501/- under Business Auxiliary Service and the same be recovered from them under Section 73 (1) read with Section 68 of the Act; vi. I confirm the demand of Cess amounting to Rs,8,165/- (Rupees eight thousand one hundred sixty five only) on the amount of service tax shown in para 70.5 against them under Section 95 of the Finance (No.2) Act, 2004 read with section 66 of the Act; vii. I confirm the demand of SHEC amounting to ₹ 1,074/- (Rupees one thousand and seventy four only) on the amount of serviced tax shown in para 70.5 against them under Section 140 of the Finance Act; The ass
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e was issued and had paid ₹ 34 lakhs prior to that. Given these facts, he states that imposition of any penalty under Section 76 was itself unjustified. The facts of this case, in the opinion of this court, notes that the assessee was aware about its service tax liability; despite this knowledge, it filed its returns claiming that no liabilities were attracted. When it smelt investigation and adverse orders, it apparently approached the service tax authorities and deposited the amounts which they were admittedly liable to pay. Such being the case of foreknowledge, in the opinion of the court, itself is an important factor that ought to have been and was taken into account by the lower revenue authorities. Hence, foreknowledge lead to the imposition of recovery of dues assessed as well as imposition of the penalty under Section 78. The court is of the opinion that the invocation of Section 78 cannot be faulted with having regard to the facts of this case. Depositing the amount due
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