April 2008
Penalty under Service Tax vis-à-vis Central Excise
By Puloma Dalal, Bakul B. Mody, Chartered Accountants
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5. Penalty under Service Tax vis-à-vis Central
Excise :
- Commission for marketing loans — Service Tax was paid before issue of show-cause
notice — Applicability of S. 80 of the Act was not considered in impugned order
— Imposition of penalty of Rs.1000 u/s.78 of the Act not noticed by Commissioner
(Appeals) while upholding penalty equal to tax u/s.76 of the Act following High
Court decision in (2006) 4 STR 177 (P & H) — Impugned order set aside and matter
remanded for fresh consideration — S. 76, S. 78 and S. 80 of the Act — S. 11AC
of Central Excise Act, 1944 (CEA).
Tax statutes, penal provisions — Act vis-à-vis CEA Act — Mandatory
penalty upheld by Com-missioner (Appeals) following High Court decision in
(2006) 4 STR 177 (P & H) — Impugned order erroneous as provisions of S. 80 of
the Act, not having any parallel in S. 11AC of CEA — S. 80 of the Act provides
for non-imposition of penalty if reasonable cause shown for failure — S. 76, S.
78 and S. 80 of the Act; S. 11AC of CEA.
