Appeal partially allowed: interest upheld, penalties dropped. Remanded for interest quantification.

The Tribunal partly allowed the appeal by upholding the interest demand and dropping all penalties imposed, citing the provisions of Section 80 and relevant legal precedents. The matter was remanded back to the original authority for quantification of the interest amount.

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Issues:
- Liability to pay service tax on additional facilities provided by the appellant to the service recipient.
- Imposition of interest and penalty under Sections 75, 76, and 78 of the Finance Act, 1994.
- Applicability of Section 80 of the Finance Act, 1994 in waiving off penalties.

Analysis:

Issue 1: Liability to pay service tax on additional facilities
The appellant, a security service provider, was found to be not discharging service tax on additional facilities provided to the service recipient, which were not included in the original consideration. The appellant contended that they were not aware of this liability and believed they were exempt as a Government entity. The lower authorities confirmed the demand of service tax, interest, and imposed penalties. The Tribunal noted that the appellant paid the service tax after the Order-in-Original was passed and sought relief from interest and penalties. The Tribunal examined previous decisions and observed that the appellant had no profit motive and had paid the service tax. The Tribunal found that the penalties imposed were not sustainable and waived them under Section 80, citing precedents. However, the Tribunal upheld the liability to pay interest for the delay in service tax payment and remanded the matter to the original authority for quantification.

Issue 2: Imposition of interest and penalty
The Tribunal considered the submissions of both parties and reviewed the material on record. It noted that the appellant had paid the service tax amount after receiving the Order-in-Original and argued that they should not be burdened with interest and penalties due to their lack of awareness regarding the tax liability. The Tribunal referenced various decisions that provided relief under Section 80 of the Finance Act, 1994, and highlighted the case of CISF vs. CCE where penalties were waived due to lack of intention to evade tax payment. Following this precedent, the Tribunal waived the penalties imposed in the impugned order but upheld the liability to pay interest for the delayed service tax payment.

Issue 3: Applicability of Section 80 in waiving off penalties
The Tribunal relied on the precedent set in the case of CISF vs. CCE to determine the applicability of Section 80 in waiving off penalties. It noted that penalties were not sustainable in law due to the absence of intention to evade service tax payment by the appellant. By invoking Section 80, the Tribunal waived the penalties imposed by the impugned order but upheld the liability to pay interest for the delayed service tax payment. The matter was remanded back to the original authority for quantification of the interest amount.

In conclusion, the Tribunal partly allowed the appeal by upholding the interest demand and dropping all penalties imposed, citing the provisions of Section 80 and relevant legal precedents.

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