2019 (1) TMI 66 - AT - Service Tax

Tribunal Waives Penalties in Finance Act Appeal

M/s M. Junction Services Ltd. Versus Commr. of CGST & Central Excise, Kolkata North

The Tribunal allowed the appeal, setting aside the penalties imposed on the appellant under various Sections of the Finance Act, 1994. The Tribunal found ... Imposition of penalty - tax with interest paid on being pointed out - no suppression of facts - Held that:- The appellant assessee immediately paid the entire amount of service tax and intimated the same to the Range Officer by producing fresh documents - further, there is no material available on record to establish the allegation of suppression of facts, mis-declaration etc. with an intent to evade payment of service tax - it is a fit case for waiver of penalty - penalty set aside - appeal allowed - decided in favor of appellant. Issues:Non-payment of service tax under reverse charge mechanism, Demand of service tax, Interest calculation, Imposition of penalties under various Sections of the Finance Act, 1994, Allegation of suppression of facts, Mis-declaration, Waiver of penalty.Analysis:1. Non-payment of service tax under reverse charge mechanism: The case involved an appellant registered with the Service Tax Department for providing Business Auxiliary service. During scrutiny, it was found that the appellant did not pay service tax under the reverse charge mechanism for consultancy fees paid during a specific period. A show-cause notice was issued regarding this non-payment.2. Demand of service tax and interest calculation: The Adjudicating Authority confirmed the demand of service tax and interest, which were already paid by the appellant before the notice was issued. The amounts were appropriated, but penalties were imposed under various Sections of the Finance Act, 1994.3. Imposition of penalties under various Sections: The lower appellate authority upheld the imposition of penalties, leading to the present appeal before the Tribunal. The appellant contested the penalties, arguing that there was no intent to evade payment of service tax and that the entire amount was paid promptly upon realization of the oversight.4. Allegation of suppression of facts and mis-declaration: The Tribunal observed that there was no evidence of suppression of facts or mis-declaration by the appellant. The appellant had paid the entire service tax amount along with interest promptly and informed the authorities about the oversight. The Tribunal found no grounds for imposing penalties under various Sections of the Finance Act, 1994.5. Waiver of penalty: Considering the facts of the case, the Tribunal invoked Section 80 of the Finance Act, 1994, and set aside the penalties imposed on the appellant. The Tribunal concluded that there was no intent to evade payment, and the appellant's immediate compliance with the payment requirements warranted a waiver of penalties.In conclusion, the Tribunal allowed the appeal, providing consequential relief to the appellant. The judgment highlighted the importance of prompt payment upon realization of errors and the absence of evidence supporting allegations of suppression or mis-declaration. The waiver of penalties under Section 80 of the Finance Act, 1994, reflected the Tribunal's consideration of the appellant's actions in rectifying the oversight.