ORDER
M.V. Ravindran, Member (J)
1. This appeal is filed by the Commissioner against the order in appeal dated 25-8-2005 that upheld the order in original as regard the confirmation of service tax payable and penalties imposed on the appellant except for the penalties under the provisions of Finance Act, 1994.
2. None appeared on behalf of the respondent despite notice. The respondent has filed a Cross-Objection which is numbered as ST/CO/124/06-SM and requested to decide the matter on merits.
3. Considered the submissions made by the learned DR and perused the record. The learned Commissioner (Appeals) has set aside the penalties imposed on the respondent under Section 76, by giving the finding as under :
As regards imposition of penalty under Section 76 of the Act, 1 am of the view that since there had never been any steps taken by the department for ascertainment of liability of the appellant under Section 68 of the Act in the instant case, penally provisions of Section 76 of the act can not justifiably be invoked against the appellant. Hence the penalty under Section 76 was not imposable and liable to be dropped as it will amount to double jeopardy.
4. I find that the above reproduced findings of the Commissioner (Appeals) is totally contradictory to his own findings in earlier page which reads as under :
After deliberating upon above points raised by the appellant and after going through the case papers on file, I find that the appellant did not opt for registration under the Finance Act, 1994 (as amended) with the department till 2004, though they provided security services to B.H.U., Varanasi since 1998. They took registration under the Act and deposited part amount of service tax due upon them only when the department issued show cause notice to them in this regard. The appellant has no reasonable cause for this kind of gross lapse, as per evidence on record. Therefore, allegation of suppression/concealment of fact with intent to evade service tax lies proved against the appellant under Section 78 of the Finance Act, 1994. Thus, benefit of Section 80 of the Act can not be granted to the appellant.
5. From the above reproduced paragraph, it is very clear that at one place the Commissioner (Appeals) is coming to the conclusion that the appellant had suppressed or concealed the fact with intent to evade service tax and is proved, while at another place, he is setting aside the penalty imposed. It is necessary to read the provisions of Section 76 which are as under :
Any person, liable to pay service tax in accordance with the provisions of Section 68 or the rules made thereunder, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees (for every day during which such failure continues) but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he filed to pay.
6. From the plain reading, it is very clear that the penalty is imposable for not paying the service tax as provided under provisions of Section 68. If that be so, setting aside of the penalty by the learned Commissioner by observing that no steps were taken by the department under Section 78 is incorrect.
7. Accordingly, 1 find that the order of learned Commissioner (Appeals) to the extent to which he sets aside the penalty under Section 76 is wrong and liable to be set aside. As regards the cross-objection filed by the respondent, cross-objection does not adduce any additional evidence as regards the reasons for not paying the amount of service tax. Since it does not provide any evidence, cross-objection is also disposed of. Accordingly, the impugned order to the extent it sets aside the penalty on the respondent under Section 76 is set aside and the department’s appeal is allowed.
(Order dictated and pronounced in the open Court on 27-9-2006).