Penalty waiver for renting of immovable property service tax confirmed where tax and interest were paid in full under Section 80A.

Section 80A of the Finance Act, 2012 provides protection from penalty under Sections 76, 77 and 78 where service tax on renting of immovable property, together with interest, is paid in full within the stipulated period. As the admitted tax liability and interest had already been discharged, the statutory conditions for waiver of penalty were satisfied. The penalties could not therefore be sustained and were set aside.

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Issues: Whether penalties under Sections 76, 77 and 78 of the Finance Act, 1994 were liable to be waived where the service tax under renting of immovable property service had already been paid along with interest, in light of Section 80A of the Finance Act, 2012.

Analysis: The appellants had discharged the admitted service tax liability under the taxable service of renting of immovable property and had also paid interest. Section 80A of the Finance Act, 2012 provides that, notwithstanding Sections 76, 77 and 78, no penalty shall be imposed for failure to pay service tax on that taxable service, subject to payment of the service tax and interest in full within the stipulated period. Since the liability and interest stood paid and the case fell within the statutory protection, the penalties could not be sustained.

Conclusion: The penalties were set aside and the assessee succeeded on the issue of penalty imposition.

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