Tribunal remands service tax penalty, directs review of short payment for Residential Complex Service

The Tribunal set aside the penalty on the service tax amount for 'Renting of Immovable Property Service' as no show cause notice was required. The matter of short payment for 'Residential Complex Service' was remanded to determine if the excess amount was paid before the due date, directing the Original Authority to decide on the service tax accordingly. The appeal was allowed, and the case was remanded for further proceedings.

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Issues:
1. Short paid service tax on 'Renting of Immovable Property Services'
2. Short paid service tax on construction of 'Residential Complex Service'

Analysis:
1. The appeal was against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Lucknow. The appellant was issued a show cause notice for short paid service tax on 'Renting of Immovable Property Services' and 'Residential Complex Service'. The Commissioner (Appeals) found the service tax liability for 'Renting of Immovable Property Service' to be Rs. 25,54,666, which was already paid by the appellant before the show cause notice was issued. The Commissioner also noted an excess amount of Rs. 11,62,889 paid by the appellant but did not consider a refund at that stage. For the 'Residential Complex Services', a short paid service tax of Rs. 6,40,460 was paid before the Order-in-Original, but a penalty of 25% of the total amount was imposed under Section 78 of the Finance Act, 1944. The appellant appealed to the Tribunal against this order.

2. The appellant argued that interest on delayed payment for 'Renting of Immovable Property Service' was paid before the show cause notice, so no notice should have been issued as per Section 73(3) of the Finance Act, 1994. They contended that since there was no suppression, the penalty under Section 78 should not apply. The Revenue supported the Order-in-Appeal. After considering the arguments and records, the Tribunal found that no show cause notice was required for 'Renting of Immovable Property', thus setting aside the penalty on the service tax amount of Rs. 25,54,666. Regarding the short payment of Rs. 6,40,460, the matter was remanded back to the Original Authority to determine if the excess amount of Rs. 11,62,889 was paid before the due date of the service tax payment. If so, no show cause notice was necessary, and the Original Authority was directed to decide on the service tax for 'Construction of Residential Complex Service' in accordance with the law. The appeal was allowed by way of remand, and the matter was sent back to the Original Authority for further proceedings.

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