Tribunal grants relief in penalty appeal for late tax return submission

The Tribunal ruled in favor of the appellant, setting aside the penalty imposed for the late submission of quarterly returns. The appellant's lack of awareness of the requirement to submit returns when no tax was payable, coupled with the timely submission of 'Nil' returns upon realization, led to the decision. The Tribunal found the situation akin to a precedent where penalties for late filing can be waived if done upon understanding the procedure. Hence, the appellant's appeal was granted relief based on the circumstances and absence of tax liability during the relevant period.

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Issues:
1. Failure to submit quarterly return for Service Tax.
2. Imposition of penalty for late submission of return.

Analysis:
1. The appellant argued that due to the introduction of Service Tax for the first time, they were unaware of the requirement to submit quarterly returns even when no tax was payable. Upon realizing the obligation, they submitted 'Nil' returns. The appellant sought waiver of the penalty citing a precedent in the case of Ashok Rastogi v. Commr. of Central Excise, Kanpur. The respondent, however, contended that the appellant admitted to the late submission of returns, advocating for the rejection of the appeal.

2. The Tribunal noted that under Section 70, the appellant was obligated to furnish quarterly returns for specific periods within a stipulated time frame. The appellant, however, submitted monthly returns for the quarters in question beyond the prescribed deadline. Although the appellant did not have any service tax liability during the relevant period, the failure to submit returns on time was acknowledged. Citing the case of Ashok Rastogi, where it was held that penalty for late filing of return can be condonable if filed upon knowledge of the procedure, the Tribunal found the appellant's case to be similar, leading to the decision to set aside the impugned order and grant relief to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed for the late submission of quarterly returns, considering the circumstances and the absence of service tax liability during the period in question.

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