Tribunal overturns penalty for late service tax payment, deems it void after full payment.

The Tribunal allowed the appeals filed by the appellants against the common order of the Commissioner (Appeals) regarding non-remittance of service tax for Renting of Immovable Property service. The penalty imposed on the appellants was considered void as they had paid the service tax and interest in full in 2011. The Tribunal held that the penal liability under Sections 76 and 78 of the Finance Act, 1994, was unsustainable, and the appeals were allowed without costs being awarded.

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Issues involved: Appeal against common order of Commissioner (Appeals) regarding non-remittance of service tax, penalty imposition, interpretation of Section 80(2) of the Finance Act, 1994.

Summary:
The appellants filed three appeals against the common order of the Commissioner (Appeals), Chandigarh, related to non-remittance of service tax for Renting of Immovable Property service. The appellants did not remit the service tax due to a judgment of the Delhi High Court, which was later reversed by a Full Bench decision. The service tax assessed along with interest was paid by the appellants in 2011, and the appeals were focused on the penalty aspect only.

The Ld. Counsel for the appellants highlighted Section 80(2) of the Finance Act, 1994, which states that no penalty shall be imposed for failure to pay service tax subject to certain conditions. As the service tax and interest were paid in full by the appellants in 2011, the penal liability under Sections 76 and 78 of the Finance Act, 1994, was considered void.

The Tribunal declared the common order of the Commissioner (Appeals) confirming the penalty imposed on the appellants as unsustainable. The appeals were allowed, and the stay petitions were disposed of without any costs being awarded.

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