DHANDAYUTHAPANI CANTEEN Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I am of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, I proceed to deal with the appeal.

(2.) IN adjudication of a show -cause notice, the original authority had confirmed demand of service tax of Rs. 2,60,225/ - and education cess of Rs. 5,204/ - totaling to Rs. 2,65,429/ - against the appellant for the period 10.9.2004 to 30.6.2006 under the proviso to Section 73(1) of the Finance Act, 1994 and had imposed penalties of Rs. 10,000/ -, Rs. 1,000/ - and Rs. 10,000/ - on them under Sections 76, 77 and 78 of the Act respectively. The authority had also confirmed demand of interest on tax against the party under Section 75. The order of adjudication was accepted by the party. However, it was not accepted in full by the department. In exercise of his revisional jurisdiction under Section 84 of the Finance Act, the Commissioner took up the matter and imposed higher penalties on the party under Sections 76 and 78 of the Act. The operative part of the Commissioner's order reads as under:

(3.) THE present appeal is against the above order of the revisional authority. The learned consultant for the applicant submits that the entire amount of service tax and education cess with interest was paid prior to issuance of the show -cause notice and that the penalties imposed on them by the original authority were also paid shortly after the order of adjudication was passed. It is further submitted that the tax liability of the appellant is not in dispute, but, during the material period, there was a doubt in the appellant's mind as to whether service tax was liable to be paid on the amounts collected by them from their customers. It is submitted that this was enough reason under Section 84 of the Act for not imposing penalty on the party under the other provisions. However, it is submitted, the appellant accepted the decision of the original authority under the said provisions (Sections 76, 77 and 78). The learned consultant also relies on certain decisions of the Tribunal in support of some of the above submissions. I have heard the learned SDR also, who, apart from reiterating the findings of the Commissioner, points out that the finding of "wilful suppression and concealment of value of taxable service", recorded by the original authority was also accepted by the party and therefore they can hardly resist the mandatory penalty imposed under Section 78 of the Act.