FIITJEE LIMITED Vs. CCE

JUDGEMENT

(1.) THE appellant filed this appeal against imposition of penalty under Section 76 and 78 of the Finance Act, 1994 vide revision order dated 14.05.2007 passed by the Commissioner of Central Excise.

(2.) LEARNED Advocate on behalf of the appellant submits that the appellants are rendering services of coaching centre. They paid tax @ 8% and filed the return accordingly. Later service tax was enhanced from 8% to 10.2% w.e.f. 10.09.2004 by Finance Act 2004. The differential amount of tax with interest were deposited by them on 24.11.2005. The adjudicating authority dropped the penalty under Section 76 and 78 of the Finance Act, 1994. After considering that the appellant was under a bonafide belief that the rate applicable was 8%. He further submits there is no suppression of facts with intent to evade tax and therefore penalty under Section 76 and 78 cannot be invoked. He relied upon the decision of the Hon'ble High Court of Karnataka in the case of CCE, Bangalore -II v. Sunitha Shetty reported in 2004 (174) FAT 313 (Kar.).

(3.) LEARNED DR on behalf of the respondent reiterates the finding of the Commissioner of Central Excise. He submits that it is reveled from the order of the Commissioner that after long persuasion by the department the appellant deposited the differential tax. He further submits that there is a delay of 14 months and therefore imposition of penalty under Section 76 is justified. He also submits that the appellant suppressed the value of the taxable service and Section 78 is rightly invoked.