Service Tax - Cestat Ahmedabad: Appellant is liable to pay the differential duty amount on the service of construction of the foundation of civil structure, however simultaneous penalty under Section 76 and 78 cannot be imposed - Appeal partly allowed [Attached order dated 23 September 2022]
- The Appellant, Popatlal N Suthar have constructed civil structure and erection of specific equipment provided to BSNL, Airtel, Vodafone, Essar Gujarat etc.
- However, on the inquiry it was found that the appellant during the period 2007-08 to 2008-09 have not paid the service tax amount of Rs. 2,60,852/- which was confirmed, penalty under Section 76 and 78 of the Finance Act, 1994 was also imposed and interest under Section 75 was also demanded.
- The appellant has paid the service tax amount of Rs. 2,24,198/- along with interest of Rs.79,427/- and 25% penalty before issuance of show cause notice.
- Against the Order-In Original the appellant filed an appeal before the Commissioner (Appeals) which was rejected by the learned Commissioner (Appeals) by upholding the Order-In-Original.
- Hence the appellant has filed this appeal.
- Whether the simultaneous penalty under Section 78 and 76 is rightly imposed?
- The Tribunal observed that there is no dispute regarding the levy of service tax on the construction of the foundation of civil structure for BSNL. It is also fact on record that the appellant has paid the substantial amount of Rs.2,24,198/- out of the total confirmed demand of Rs. 2,60,852/- and also paid the interest and 25% penalty.
- The Tribunal held that 75% of the penalty deserves to be dropped, however, the appellant is liable to pay the differential duty amount. As regard the penalty imposed under Section 78 & 76 simultaneously, the issue is no longer res-integra in the light of Hon’ble Gujarat High Court judgment in the case of RAVAL TRADING COMPANY- 2016 according to which simultaneous penalty under Section 78 and 76 cannot be imposed therefore, following the ratio of the said judgment, The Tribunal set aside the penalty imposed under Section 76.
- Accordingly, the impugned order stands modified to the above extent. The appeal filed by the appellant is partly allowed.