HOTEL VIJAYETHA Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE challenge in this appeal is to the imposition of penalty under the provisions of Section 78 of the Finance Act, 1994.

(2.) I have heard both sides. Penalty under Section 78 is imposable when intention to evade payment of duty by suppression etc., is established against the assessees. In the present case, the lower appellate authority has held that non -inclusion of electricity charges collected by the assessees customers and non -inclusion of the cost of cooking gas and firewood supplied to customers should be treated as suppression of facts with the intention to evade payment of service tax. However, mere non -inclusion is not sufficient to hold that the assessees had suppressed such non -inclusion what is required to be shown by the Revenue is that the assessees had knowledge that they were required to include the above elements and still did not do so. This is missing in the present case. I, therefore, agree with the assessees that Section 78 penalty is not attracted and accordingly set aside the same and allow the appeal.