1. This appeal was filed by the proprietor of Hotel Alankar. There is no representation for the appellant despite notice, nor any request of his for adjournment.

2. On a perusal of the records, I find that, in adjudication of a show-cause notice dated 6.1.2009, the original authority had passed the following order:

"1. I confirm the demand of Service Tax of Rs. 1,96,184/- (ST-192161+E.Cess-4022) as detailed in Annexure-I to this order, towards service tax not paid under Section 66 of Finance Act, 1994. I further, appropriate the amount of Rs. 1,96,184/- from the amount already paid i.e., Rs. 3,69,459/- paid by the assessee on 8.11.2008 & 19.12.2008.

2. I also confirm the demand of interest of Rs. 59,678/- on the service tax payable @ 13% PA till the date of actual payment as detailed in the annexure-l to this order. I further appropriate the amount of Rs. 59,678/-from amount already paid i.e., Rs. 3,69,459/- paid by the assessee on 8.12.2008 & 19.12.2008.

3. I refrain from imposing any penalties under Section 76 or Section 78 of Finance Act, 1994 drawing powers from Section 80 of Finance Act, 1994.

4. An amount of Rs. 1,13,597/- is paid in excess by the assessee as detailed in the annexure-l to this order. This may be adjusted towards any future liability of the assessee."

The show-cause notice had demanded total service tax of Rs. 3,68,727/- from the assessee for the period from September 2004 to December 2006 in respect of outdoor catering service. The demand was worked out after allowing abatement to the extent of 50% of the total catering charges. The adjudicating authority took the view that the assessee did not have tax liability for the period prior to 16.6.2005 and hence the demand of service tax of Rs. 1,96,184/-confirmed against the assessee. Equal amount was appropriated from the amount of Rs. 3,69,459/- already paid by the assessee. Interest on service tax was also appropriated from the said amount of Rs. 3,69,459/- already paid by the assessee. The remainder was allowed to be adjusted towards "any future liability". The adjudicating authority also invoked Section 80 of the Finance Act, 1994 to drop all penal proposals raised in the show-cause notice. The order-in-original was reviewed in the department and accordingly an appeal preferred to the Commissioner (Appeals). Accepting all the grounds raised by the department, the learned Commissioner (Appeals) passed the following order:

"(i) The Service Tax amount of Rs. 3,68,727/- for the entire period involved i.e., from 10.09.2004 to 12/2006, is liable to the paid and hence confirmed accordingly under Section 73(2) of FA. The service tax amount of Rs. 3,68,497/- stand appropriated against the above redetermined service tax amount.

(ii) The demand for interest under Section 75 ibid is confirmed in respect of the above service tax amount, pertaining to the entire period 19.09.2004 to 12/2006.

(iii) I impose a penalty of Rs. 200/- per day or 2% of the service tax involved per month, whichever is highest, from the first day after the due date till date of actual payment of the outstanding amount of service tax, but subject to a maximum of the service tax involved; on the respondents, under Section 76 of the FA.

(iv) I impose a penalty of Rs. 3,68,727/- under Section 78 of the FA, on the respondents."

The present appeal of the assessee is directed against the above order of the Commissioner (Appeals).

3. On a perusal of the records, I find that the appellant was rendering catering service to M/s. Dr. Reddy's Laboratories Ltd. during the above period, but he was not paying service tax. From an audit note prepared by the Accountant General's auditors on the accounts of Dr. Reddy's Laboratories Ltd. in September 2006 as also from the appellant's response to the queries issued by the department on the basis of the said audit note, it appeared to the department that the appellant was rendering outdoor catering service to Dr. Reddy's Laboratories Ltd. without obtaining registration, f