2007 (12) TMI 157 - AT - Service Tax

Appeal granted as no service tax confirmed, interest and penalty order set aside.

The appeal was allowed with consequential relief as the Appellate Tribunal CESTAT Mumbai found that no amount of service tax was confirmed by the ... Levy of interest and penalty without confirmation of underlying tax demand - Requirement of adjudication of primary tax demand before imposition of interest and penalty - Validity of appellate order confirming only interest and penalty in absence of confirmed service tax liabilityLevy of interest and penalty without confirmation of underlying tax demand - Requirement of adjudication of primary tax demand before imposition of interest and penalty - Whether interest and penalty can be sustained when the show cause notice and orders do not confirm any service tax demand against the appellants - HELD THAT: - The Tribunal found that neither the show cause notice nor the orders of the adjudicating authority and the lower appellate authority had confirmed any amount as service tax payable by the appellants. The impugned proceedings related only to levied interest and penalty without establishing a primary service tax liability. Imposition of interest and penalty in the absence of a confirmed tax demand was held not to be legally sustainable. Consequential relief flowing from setting aside such interest and penalty was to be given in accordance with law.Impugned order imposing interest and penalty set aside for want of confirmation of the underlying service tax demand; appeal allowed with consequential relief, if any.Final Conclusion: The appeal is allowed: interest and penalty imposed on the appellants are set aside because no service tax demand was confirmed against them; consequential relief, if any, to follow in accordance with law. The Appellate Tribunal CESTAT Mumbai heard an appeal regarding the levy of interest and penalty on a security agency for not paying service tax on time. The tribunal found that no amount of service tax was confirmed by the authorities, so the order imposing interest and penalty was set aside. The appeal was allowed with consequential relief.