Penalty bar for timely tax and interest payment under service tax law applies when statutory conditions are met

Penalties for renting of immovable property service were found unsustainable where the service tax liability, together with interest, had been discharged within six months. The text notes that this payment satisfied the statutory condition in Section 80A of the Finance Act, 2012, which barred imposition of penalty in such circumstances. On that basis, the penalties were set aside in the surviving appeals.

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Issues: Whether penalties were sustainable when the service tax liability together with interest had been discharged within six months so as to attract the statutory bar against penalty.

Analysis: The demand related to renting of immovable property service. The liability along with interest had already been deposited within the period contemplated by Section 80A of the Finance Act, 2012. On that footing, the statutory condition for non-imposition of penalty stood satisfied, and the penalties could not be sustained against the appellants whose appeals had not abated.

Conclusion: The penalties were set aside in respect of the surviving appeals.

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