2013 (12) TMI 1516 - AT - Service Tax

Tribunal Upholds Commissioner's Decision on Penalty for Income Suppression in Service Tax Returns

The Tribunal upheld the decision of the Commissioner(Appeals) and dismissed the Revenue's appeal regarding penalty imposition under Section 80 for ... - Issues involved: Interpretation of Section 80 for penalty imposition in case of suppression of income in service tax returns.Summary:The case involved the appellant engaged in providing renting of car service, where proceedings were initiated due to a variance in income declared in ST-3 returns compared to income tax returns. The appellant argued that the difference arose from a bonafide belief that they were not liable to pay service tax on cars rented to specific entities. Despite accepting the demand and paying the differential tax with interest before a show-cause notice, the Revenue appealed against the Commissioner(Appeals) decision to set aside the penalty invoking Section 80. The Revenue contended that the appellant's belief was unfounded and penalty should have been imposed due to suppression of income.Upon review, the Tribunal found the Revenue's stance incorrect on both counts. The Tribunal highlighted that if penalty was mandatory in cases of suppression, Section 80 would be redundant. The Tribunal acknowledged that anyone could hold a belief similar to the appellant's in this scenario. Consequently, the Tribunal upheld the decision of the Commissioner(Appeals) and dismissed the Revenue's appeal, emphasizing that the appeal lacked merit.