The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no penalty shall be imposed under section 78A of the Finance Act,1994 when there was no evidence brought on record to establish suppression of fact.
Mahendra Kumar Anchalia, the appellant assessee engaged in providing Works Contract Services by way of construction of Railway infrastructure such as the Erection and Commissioning of Signaling and Telecommunication system of the Railway, and also provided the above Works Contract Service on a sub-contracting basis and undertaking Maintenance or Repair Service in respect of the above services.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the service tax demand on the works contract service of the railway and for the repair and maintenance service and for imposing the penalties under sections 77 and 78A of the Finance Act,1994.
Sushil Goel, the counsel for the assessee contended that the assessee had already paid the service tax along with interest and had been appropriated in the order.
Also submitted that there was no evidence brought on record to establish suppression of fact to evade payment of tax and no penalty can be imposed under section 78 of the Finance Act.
S. Mukhopadhyay, the counsel for the department contended that the demand raised by the department was as per the law and the imposition of penalty under sections 77 and 78A of the Finance Act was proper and liable to be sustained.
The Bench observed that there is no evidence brought on record to establish suppression of fact to evade payment of tax and no penalty imposable under section 78 of the Finance Act.
The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the penalty imposed on the assessee while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the Judgment
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
