CESTAT Upholds Penalty u/s 77 of Finance Act for Failure to Take Registration in Accordance with Section 69 of Finance Act [Read Order]

The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty imposed under section 77 of the Finance Act,1994 for failure to take registration in accordance with section 69 of the Finance Act. 

Patanjali Yogpeeth Trust, the appellant assessee was engaged in the activity of providing services relating to health and fitness by way of teaching yoga and meditation, and the assessee’s trust working under the aegis of Baba Ramdev and Acharya Balkrishna are inter-alia engaged in providing Yoga training to various residential and non-residential camps. 

For participation in such camps, a charge of participation fees from the participants on the name of the donation was taken and this amount was collected at donation but it was fees for providing the services and hence covered under the definition of consideration. 

The assessee appealed against the order passed by the Commissioner of Customs and Central Excise for confirming the service tax demand and the penalty imposed under section 77 of the Finance Act on the activities of yoga service rendered by the assessee. 

Atul Gupta and Prakhar Shukla, the counsels for the assessee contended that the assessee was providing a cure for specific agents so not covered under the definition of health and fitness services. In residential yoga camps, the amounts were charged only for lodging and boarding and not for imparting instructions on yoga which were free of cost. 

Sarweshwar T. Khairnar, the counsel for the department contended that the assessee had not taken any registration, which was requisite under the Finance Act, 1994 and they were not paying any service tax on the services provided by them. 

The Bench observed that the imposition of penalty under Section 77 of the Finance Act for their failure to take registration under the provisions made thereunder at the rate of two hundred rupees for every day during which such failure continued, starting with the first day after the due date, till the date of actual compliance was legal and upheld. 

The two-member bench comprising Choudhary (Judicial) and Sanjiv Srivastava (Technical) upheld the penalty imposed under section 77 of the Finance Act. 

To Read the full text of the Order CLICK HERE

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