2014 (12) TMI 707 - AT - Service Tax

Court overturns penalty under Section 76 for Service Tax on renting immovable property. Appellant's reliance on Section 80(2) successful.

YASMIN ASPANDIAR IRANI Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-III

The penalty imposed under Section 76 for Service Tax on renting of immovable property services for a specific period was set aside by the court. The ... Penalty u/s 76 - Renting of Immovable Property Services - Whether penalty under Section 76 is leviable in the case of the appellant, who is owner of immovable property liable to Service Tax under the head 'Renting of Immovable Property Services' for the period April, 2009 to March, 2010 - Held that:- penalty was imposed vide Order-in-Original dated 16.11.2011 and confirmed by impugned Order-in-Appeal dated 27.2.2012. But, by introduction of sub-section (2) of Section 80 vide Finance Act, 2012, granting extension of time, the penalty imposed is bad and not sustainable. Thus, the impugned order is set aside by setting aside the penalty imposed under Section 76 - Decided in favour of assessee. Issues:1. Whether penalty under Section 76 is leviable for Service Tax on renting of immovable property services for a specific period.Analysis:The judgment pertains to an appeal arising from an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals). The main issue in question is the imposition of a penalty under Section 76 concerning the appellant, who is the owner of immovable property subject to Service Tax for the period from April 2009 to March 2010. The appellant had paid the Service Tax along with interest, with the final payment made on 27.3.2012, after an initial partial payment on 11.11.2011. The appellant relied on Section 80(2) of the Finance Act, 1994, which states that no penalty will be imposed if the Service Tax for renting of immovable property services is deposited within six months of the introduction of the Finance Act, 2012. As the appellant complied with this provision by paying the tax before the specified date, it was argued that the penalty imposed should be set aside.Upon considering the arguments presented, the judge noted that the penalty was initially imposed on 16.11.2011 and confirmed in the impugned Order-in-Appeal dated 27.2.2012. However, with the enactment of sub-section (2) of Section 80 through the Finance Act, 2012, an extension of time was granted, rendering the penalty invalid and unsustainable. Consequently, the judge set aside the penalty imposed under Section 76, leading to the allowance of the appeal. The decision was dictated and pronounced in court by the judge, thereby concluding the matter.