SATHYA ENGINEERING AND RAMESH ENGINEERING Vs. CCE

JUDGEMENT

(1.) THE issue common in both these appeals is penal action taken against the assessees under the provisions of Sections 77 and 78 of the Finance Act, 1994.

(2.) I have heard both sides. The services provided by the assessees are manpower recruitment supply. Their contention is that being individuals, and they were not aware of their liability to pay service tax is plausible. The Department has not discharged the burden of establishing the knowledge on their part of liability to pay tax during the period in dispute, so as to hold them guilty of suppression. I, therefore, set aside the penalty on both the assessees under Section 78 of the Finance Act by extending the protection under Section 80 ibid. However, I see no reason to interfere with the imposition of penalty under Section 77 and accordingly uphold the same.