FINANCE ACT, 1994

Section 76 Section 77 Section 78

Penalty - Liability to tax - Photo processing of aerial films, general photography, photography by low level flying atrcrafts specially suited for purpose - Imposition of

Department informed assessee that their activities related to photography services, scientific or technical consultancy service and commercial training and coaching services, etc., are taxable sendees and therefore, they are liable for payment of tax. Accordingly, the assessee applied for and obtained registration to the Service Tax Department under the heads 'photography service', 'scientific and technical consultancy service' and 'commercial training and coaching service'. Assessee was called upon to explain as to why an amount should not be demanded from them as service tax on photography services and scientific and technical consultancy services rendered by them. It was also proposed to impose penalties under sections 76, 77 and 78 upon assessee. Held: Assessee was an autonomous organisation under the Department of Space, Government of India and not a private business entity. If the assessee was clearly aware that it had to pay service tax, it could have billed its clients for the service tax as well. By not paying the service tax, assessee, a Governmental organisation, was not gaining anything. It could not, therefore, be held to have committed fraud or collusion or wilful misstatement or suppression of facts with an intent to evade payment of service tax. That in view of the finding that there was no evidence of wilful suppression of facts with intent to evade payment of service tax, no penalty was imposable under sections 76, 77 and 78.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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