The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed under the category of construction service and held that no penalty can be imposed under section 76 of the Finance Act,1994 on construction service for the period before 01.06.2007.
Solux Galfab Private Limited, the respondent-assessee was a service provider and provided services, namely, Business Auxiliary Services, Construction Services, Erection and Painting Services, and Goods Transport Agency Services.
The revenue appealed against the order passed by the Commissioner (Appeals) for not imposing the penalty on the assessee under Section 76 of the Finance Act.
N.K.Chowdhury, the counsel for the assessee contended that the department confirmed the demand along with interest and penalty under Section 78 of the Finance Act which was adjudicated, and the demand proposed was confirmed and a penalty under Section 78 of the Act, was also imposed, thus no penalty was imposed on the assessee under Section 76 of the Finance Act.
J.Chattopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that the penalty had to be imposed under section 76 of the Finance Act on the assessee along with the demand for service tax.
The Bench observed that no service tax is payable by the assessee for the period before 01.06.2007 under the category of construction services, therefore no penalty can be imposed under section 76 of the Finance Act.
The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that no penalty was imposable on the assessee under the category of Construction service for the period before 01.06.2007 while dismissing the appeal filed by the revenue.
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