Amnesty Scheme immunity from penalty applies where tax and interest are paid, barring penalties under service tax law.

Where an assessee avails the Amnesty Scheme and discharges the service tax liability with interest, penalty under sections 76 and 77 of the Finance Act, 1994 is not payable. A departmental circular clarified that once the tax liability is determined and the scheme is invoked, immunity from penalty follows. The Tribunal's view that such relief was available was therefore treated as consistent with law, and the Amnesty Scheme was applied to protect the assessee from penalty.

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Issues: Whether penalties under sections 76 and 77 of the Finance Act, 1994 were liable to be set aside where the assessee availed the Amnesty Scheme and paid the duty and interest.

Analysis: The assessee had availed the benefit of the Amnesty Scheme and discharged the duty and interest. A departmental circular clarified that where the tax liability is determined and the assessee avails the scheme, penalty is not payable. On that basis, the Tribunal's view that immunity from penalty was available was held to accord with law.

Conclusion: The benefit of the Amnesty Scheme protected the assessee from penalty under sections 76 and 77 of the Finance Act, 1994.

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