2016 (2) TMI 1396 - HC - Service Tax

Tax Penalty Overturned: Late Payment Resolved Before Notice, No Revenue Loss Proves Taxpayer's Compliance

HC upheld CESTAT's order quashing a penalty against a proprietary concern for service tax delay. Despite late payment during 2000-2005, the taxpayer ... Setting aside of penalty order - even before SCN was issued, the service tax liability with interest component was set aside - HELD THAT:- The Tribunal acted well within its jurisdiction and took note of the fact that there was no loss to the Revenue and the unpaid service tax component was paid with interest due thereon. Under such circumstances, there are no ground to entertain the appeal at the instance of the Revenue. This matter, therefore, fails. Appeal dismissed. The Kerala High Court, in an appeal by the Revenue against the Customs, Excise and Service Tax Appellate Tribunal's order setting aside a penalty, upheld the Tribunal's decision. The respondent, a proprietary concern, had delayed payment of service tax for 2000-2005 but ultimately paid the tax with interest on 8-2-2015. The Tribunal found that since the service tax liability with interest was settled before the show cause notice dated 29-9-2005, 'the penalty proceedings were not in order.' The Court agreed, noting 'there was no loss to the Revenue' and that the Tribunal 'acted well within its jurisdiction.' Consequently, the appeal was dismissed.