The Delhi CESTAT held that the penalty under Section 76 and 78 cannot be imposed simultaneously.
The actual movement of goods was done by the service recipient by using their own Hydra equipment and appellant have provided ancillary service of loading and unloading the material which is exempted as per the various decision. The appellant submits that the Learned Commissioner (Appeals) erred by levying the tax under Manpower Supply Service and not under cargo handling service therefore, the same is not sustainable.
As regard the demand of service tax of Rs. 51,126/- it is the submission of the appellant that this is towards house rent charges which was reimbursed by their customers. It is his submission that the Assistant Commissioner as well as the Commissioner (Appeals) have failed to recognize that the facility of residence was provided to the workers at the remote site by the contractors which was the responsibility of the contractee and thereby will not be liable to levy of tax.
These charges is nothing but the reimbursement during the provision of service therefore, the same is not taxable.
As regard the penalties imposed, it is the submission of the appellant that since the major amount was already paid and remaining amount was on debatable issue, the penalties are not sustainable invoking Section 80 of the Finance Act, 1994.
The CESTAT held that the penalty imposed under Section 76, 77 and 78, the appellant have recorded the entire transaction in the books of account. They have worked under the contract, they have admittedly paid the major amount of Rs. 36, 00,875/- along with interest of Rs. 4,23,451/- and the remaining amount involved is on debatable issue, therefore, malafide intention cannot be attributed to the appellant. In these circumstances by invoking Section 80, the penalties under section 76, 77 and 78 are not imposable.
Case Title: M D Engineers V/s C.C.E. & S.T.-Vadodara-i