The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the penalty under section 77(1)(c ) of the Finance Act,1994 based on the Form 26AS obtained from the Income Tax Department on the grounds of non-submission of invoices.

Right Resource Management Service, the appellant assessee was registered with the Service Tax department for providing ‘Manpower supply Service’ and it has been paying service tax and filing Service tax returns.

The assessee appealed against the order passed by the Commissioner of Central Excise for confirming the service tax demand on the manpower supply service and for the imposition of penalty under sections 77 and 78 of the Finance Act,1994 against the assessee.

R M Saxena and Rajesh Kumar, the counsels for the assessee contended that the department wrongly alleged that the assessee had not provided the requisite information/ documents such as Form 26AS, balance sheets, and copies of the bills issued by it, and all these documents, except the bills which are voluminous, were resumed by the officers during search on 30.3.2015 itself and only the Form 26AS for the period 2010-11 and 2011-12 of the assessee were obtained by the officers from the Income Tax department.

S K Meena, the counsel for the department contended that the assessee filed the returns much after the due date and if the date of actual filing of returns was considered.

The Bench observed that the show cause notice was issued based on Form 26AS of the assessee obtained from the Income Tax department which shows how much was paid by various clients to the assessee and the assertion of the counsel that the penalty under this section cannot exceed Rs. 10,000/- was also not correct and the penalty cannot be less than Rs. 10,000/- but there was no upper limit.

Thus the penalty imposed under section 77(1) (c) of the Finance Act was legally sustainable.  The two-member bench comprising Dilip Gupta (President) and Subba Rao (Technical) upheld the penalty imposed under section 77(1)(c ) of the Finance Act against the assessee.