Amnesty scheme relief for service tax defaults where tax and interest were paid before the prescribed date.

The amnesty scheme waived penal action for service tax defaults where the tax and interest were deposited before 30-10-2004. As the assessee had discharged the entire service tax liability and interest on 4-10-2004 for the period April 1999 to April 2003, the case fell within the scheme's relief. The penalty for non-payment of service tax was therefore treated as unsustainable and set aside.

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Issues: Whether the penalty imposed for non-payment of service tax was liable to be set aside in view of the amnesty scheme when the assessee had paid the entire service tax liability and interest before the stipulated date.

Analysis: The liability related to the period April 1999 to April 2003. The assessee discharged the entire service tax liability and interest on 4-10-2004. The applicable amnesty scheme, issued by the Ministry of Finance, waived penal action where the tax and interest were deposited before 30-10-2004. The Tribunal followed the same scheme in earlier decisions and treated the case as covered by that relief.

Conclusion: The penalty was not sustainable and was set aside in favour of the assessee.

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