Appellant granted waiver of penalties under Finance Act 1994, based on timely tax payment and Tribunal order.

The appellant sought waiver of penalties under various Sections of the Finance Act, 1994. The Commissioner imposed penalties, but the Member (T) found that penalties were not warranted as the appellant paid tax before the notice and acted based on a Tribunal order and CBEC Circular. The Member (T) granted waiver of pre-deposit and stay of penalty recovery until final disposal of the appeal under Section 80 of the Finance Act.

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Issues:
Waiver of penalties under various Sections of the Finance Act, 1994 imposed on the appellant in the impugned order.

Analysis:
The case involved the appellant seeking waiver of penalties imposed under various Sections of the Finance Act, 1994. The original authority had dropped the proposal to penalize the appellants for violation of provisions, but the Commissioner imposed penalties under Sections 76, 77, and 78 of the Finance Act '94. The appellant, a corporation handling, storing, and transporting fertilizer, did not pay service tax for services rendered after April 2003. The customer stopped reimbursing service tax based on legal advice. A Show Cause Notice was issued in 2006, proposing to demand unpaid service tax. The appellants paid the tax due and interest before and after the notice. The ld. Counsel for the appellants argued citing a CBEC Circular and a Tribunal order that the appellant was not required to pay service tax. The ld. SDR contended that penalties were not imposed by the original authority based on cooperation of the appellants, which he considered a wrong ground. The Member (T) found that the appellants paid tax before the notice, and based on the Tribunal's order and CBEC Circular, no penalty needed to be imposed. The Member (T) noted that penalties can be waived under Section 80 of the Finance Act if violations were not deliberate but due to interpretation of provisions. Consequently, the Member (T) granted waiver of pre-deposit and stay of penalty recovery until final disposal of the appeal.

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