Service Tax Act : Section 78, 79, 80, 81, 82 and 83

As on 24.10.2013

78. Penalty for suppressing value of taxable service. -

4[(1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of -

4 Substituted (w.e.f. 8.04.2011) by s.74 of the Finance Act, 2011(8 of 2011)

(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or (d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall be equal to the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded:

Provided that where true and complete details of the transactions are available in the specified records, penalty shall be reduced to fifty per cent. of the service tax so not levied or paid or short-levied or short-paid or erroneously refunded:

Provided further that where such service tax and the interest payable thereon is paid within thirty days from the date of communication of order of the Central Excise Officer determining such service tax, the amount of penalty liable to be paid by such person under the first proviso shall be twenty-five per cent. of such service tax:

Provided also that the benefit of reduced penalty under the second proviso shall be available only if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso:

Provided also that in case of a service provider whose value of taxable services does not exceed sixty lakh rupees during any of the years covered by the notice or during the last preceding financial year, the period of thirty days shall be extended to ninety days.

(2) Where the service tax determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the service tax as reduced or increased, as the case may be, shall be taken into account:

Provided that in case where the service tax to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the second proviso to sub-section (1), shall be available, if the amount of service tax so increased, the interest payable thereon and twenty-five per cent. of the consequential increase of penalty have also been paid within thirty days or ninety days, as the case may be, of communication of the order by which such increase in service tax takes effect:

Provided further that if the penalty is payable under this section, the provisions of section 76 shall not apply.

Explanation.- For the removal of doubts, it is hereby declared that any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the second proviso to sub-section (1) or the first proviso to sub-section (2) shall be adjusted against the total amount due from such person.]

878A. Where a company has committed any of the following contraventions, namely:-

8.inserted by the Finance Act , 2013 w.e.f.10-5-2013

(a) evasion of service tax; or

(b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable service in violation of the rules made under the provisions of this Chapter; or

(c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or

(d) failure to pay any amount collected as service tax to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due,

then any director, manager, secretary or other officer of such company, who at the time of such contravention was in charge of, and was responsible to, the company for the conduct of business of such company and was knowingly concerned with such contravention, shall be liable to a penalty which may extend to one lakh rupees.";

79. 1[Omitted]

1 Omitted (w.e.f. 10.09.2004) by s. 90 of the Finance (No. 2) Act, 2004 (23 of 2004).

80. Penalty not to be imposed in certain cases.

2(1) Notwithstanding anything contained in the provisions of section 76 3[section 77 or 4[first proviso to sub- section (1) of section 78]], no penalty shall be imposable on the assessee for any failure referred to in said provisions, if the assessee proves that there was reasonable cause for the said failure.

2 Inserted wef 28.5.2012 by the Finance Act, 2012.

5"(2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President.";

5 Inserted wef 28.5.2012 by the Finance Act, 2012.

81. 6[Omitted]

82. Power to search premises -

(1)7[If the 1[ Joint Commissioner of Central Excise] has reason to believe] that any documents or book or things which in his opinion will be any useful for or relevant to proceedings under this Chapter are secreted in any place, he may authorize any 2[ ***] 3[Superintendent of Central Central Excise] 4[ to search for and seize or may himself search for and seize, such documents or books or things].

1 Substituted (w.e.f. 8.04.2011) by s.74 of the Finance Act, 2011(8 of 2011)
2 Substituted (w.e.f. 16.08.2002) by s. 149 of the Finance Act, 2002 (20 of 2002)
3 Substituted (w.e.f. 8.04.2011) by s.74 of the Finance Act, 2011(8 of 2011)
4 Substituted (w.e.f. 16.08.2002) by s. 149 of the Finance Act, 2002 (20 of 2002)
5 Central Excises and Salt Act, 1944 renamed by s.71 of the Finance(No.2) Act, 1996 (33 of 1996)

(2) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches, shall, so far as may be, apply or searches under this section as they apply to searches under that Code.

83. Application of certain provisions of Act 1 of 1944 -

The provisions of the following section of the 5[Central Excise Act, 1944], as in force from time to time, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise: -

5 Central Excises and Salt Act, 1944 renamed by s.71 of the Finance(No.2) Act, 1996 (33 of 1996)

6[13sub- section (2) of section 9A"], 9AA, 9B, 9C, 9D, 9E, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 7(12E, 14, 15, 31, 32, 32A to 32P (both inclusive), 33A, 34A, 35EE, 35F)],8[35FF,] to 35O (both inclusive}, 35Q, 9[35R,] 36,36A,37A, 37B, 37C, 37D 10[38A] and 40.

6 Substituted (w.e.f. 8.04.2011) by s.74 of the Finance Act, 2011(8 of 2011)
7 Substituted w.e.f 28.5.2012 by the Finance Act, 2012
8 Inserted (w.e.f. 10.05.2008) by s. 90 of the Finance Act, 2008 (18 of 2008).
9 Inserted (w.e.f. 20.10.2010) by s.74 of the Finance Act, 2011 (8 of 2011).
10 Inserted (w.e.f. 11.05.2007) by s. 135 of the Finance Act, 2007 (22 of 2007)
13. 9A", the words, brackets, figures and letter "sub- section (2) of section 9A substituted by the Finance Act, 2013 w.e.f 10-5-2013

11[83A Power of adjudication.

11 Inserted (w.e.f. 13.05.2005) by s.88 of the Finance Act, 2005 (18 of 2005)

Where under this Chapter or the rules made thereunder any person is liable to a penalty, such penalty may be adjudged by the Central Excise Officer conferred with such power as the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, by notification in the Official Gazette, specify.]

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