Penalty for delayed service tax payment was deleted where tax and interest were paid before notice and no evasion intent was shown.

Penalty for delayed service tax payment on goods transport agency services was held unsustainable where the assessee paid the tax and interest before issuance of the show-cause notice. The Board's circular covering pre-31-12-2005 omissions provided that recovery should ordinarily be confined to tax with interest, and penalty should not be imposed unless fraud, collusion, suppression of facts, wilful misstatement, or similar intent to evade tax was established. As no such allegation was made out on the record, the circular and the earlier tribunal view supported deletion of penalty in favour of the assessee.

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Issues: Whether penalty was leviable for delayed payment of service tax on goods transport agency services when tax and interest were paid before issuance of the show-cause notice.

Analysis: The appellant discharged the service tax liability, along with interest, before 31-12-2005 and before the show-cause notice. The Board's circular on goods transport by road stipulated that for omissions or procedural lapses committed before that date, recovery should ordinarily be limited to tax with interest and no penalty should be imposed unless there was deliberate fraud, collusion, suppression of facts, wilful misstatement, or similar intent to evade tax. No such allegation was made out on the record. The case was therefore covered by the circular and the earlier tribunal view relied upon in the order.

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

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