Rakesh Kumar, J.

1. The appellant in the year 2001 entered into a licence agreement with M/s Gerard Kessels Sociedad Anonima, Spain for use of the technology developed by them for manufacture of an organic chemicals - D (-) - para-hydroxyphenylglycine (hereinafter referred to as PHPG) for which royalty per annum was being paid @ 2.5% on the annual sales turnover. The intellectual property rights service became taxable in the year 2004. Since, the appellant were not paying service tax on the royalty amount being paid by them to their foreign collaborator whose technology was being used for manufacture of PHPG under licence, two show cause notices dated 07/1/08 and 11/3/08 were issued to them for payment of service tax amounting to Rs. 14,98,776/- alongwith interest for the period from October 2004 to December 2007 and also for imposition of penalty. The above show cause notices were adjudicated by the Additional Commissioner vide order-in-original dated 26/02/09 by which she confirmed the above-mentioned service tax demand alongwith interest and appropriated the amount of Rs. 14,98,776/- and Rs. 53,976/- already paid by the appellant towards service tax demand and interest. This demand was confirmed by the Additional Commissioner by invoking extended period under proviso to Section 73 (1) of the Finance Act, 1994. The Additional Commissioner while confirming the service tax demand alongwith interest did not impose any penalty on the appellant under Section 76, 77 and 78 by invoking the provisions of Section 80 of the Finance Act, 1994, holding that she is satisfied that there were valid reasons for the appellants failure to discharge their service tax liability. The portion of the Additional Commissioners order dropping the penalty proceedings was reviewed by the Jurisdictional Commissioner of Central Excise, under the provisions of Section 84 of the Finance Act, 1994 and vide Order-in-Revision No. 05/Commr/MRT-I/2011 dated 17/02/2011 he modified the Additional Commissioners order by imposing penalties on them under Section 76, 77 and 78. While penalty of Rs. 12,87,153/- was imposed under Section 76, penalty of Rs. 1,000/- was imposed under Section 77 and Rs. 14,98,776/- was imposed under Section 78. Against this order of the Commissioner, this appeal has been filed.

2. Heard both the sides.

3. Shri S.C. Kamra, Advocate, the learned Counsel for the appellant, pleaded that the service tax is being charged from the appellant as recipient of the service provided by a service provider abroad, that provisions in this regard had been introduced w.e.f. 18/4/06 by introducing Section 66A and that in view of judgment of Honble Bombay High court in the case of Indian National Shipowners Association vs. Union of India reported in 2009 (13) S.T.R. 235 (Bom.), during the period prior to 18/04/06, service tax could not be charged from the service recipient in India in respect of the service provided to them by off-shore service providers, that in spite of this, the appellant paid the service tax for the entire period including the period prior to 18/4/06 alongwith interest thereon, that the entire amount of service tax paid by the appellant was available to them as Cenvat credit, and, hence, there could not be any intention on their part to evade the tax, that non-payment of service tax was only on account of confusion prevailing on the issue of levy during the period of dispute, that in view of this, the Additional Commissioner had correctly waived the imposition of penalty under Section 76, 77 and 78 of the Finance Act, 1994 by invoking Section 80 ibid and, therefore, the impugned order of the Commissioner imposing penalty on the appellant under Section 76, 77 and 78 ibid is not correct.

4. Shri Davinder Singh, the learned Jt. CDR, pointing out to the Additional Commissioners findings in para 4.16 of the order of the order-in-original stated that when service tax demand has been confirmed by invoking extended limitation period under proviso to Section 73 (1) and when that portion of the order-in-original has not been challenged by the appellant, and when the language of the proviso to Section 73 (1) and of Section 78 of the Finance Act, 1994 is identical, once the service tax demand was confirmed by invoking proviso to Section 73 (1), penalty under Section 76, 77 and 78 cannot be waived by invoking Section 80, as once finding is given that the non-payment of the service tax was deliberate and due to contravention of the provisions of Finance Act, 1994 and the rules made thereunder with intent to evade the tax, there cannot be any bonafide reason for failure to discharge the service tax liability so as to invoke Section 80. He, therefore, pleaded that there is no infirmity in the impugned order.

5. We have considered the submissions from both the sides and perused the records.

6. It is seen that the original Adjudicating Authority has confirmed service tax demand by invoking extended period under proviso to Section 73 (1) on the basis of finding that the non-payment of the service tax was attributable to their intention to evade the tax. This finding of the Additional Commissioner has not been challenged by the appellant. Once such finding is given, there would be no scope for the conclusion that the appellant did not discharge the service tax liability due to bonafide reasons. Confirmation of service tax demand by invoking proviso to Section 73 (1) and waiver of penalty by invoking Section 80 do not go hand in hand. In view of this, we do not find any infirmity in the impugned order. The appeal is dismissed.