2009 (9) TMI 188 - AT - Service Tax

Appellant Granted Waiver in Tax Case Due to Lack of Information on Exemptions

The Tribunal granted the appellant's request for waiver of pre-deposit in a Service Tax case where the appellant mistakenly paid the tax due to lack of ... Small scale exemption - The appellant explains that the Service Tax registration was taken by him immediately on the issuance of the notification under the service category of “renting of immovable properties”. It is his submission that they were not informed about the exemption available by the authorities, as regards their eligibility for exemption upto Rs. 8 laths and they have discharged the Service Tax liability under mistake. - we find that the option of exercising to avail the exemption was not at all exercised, but appellant paid the Service Tax liability under mistaken understanding of the law. This cannot come in the way of otherwise eligible benefit to an assessee. As such, we find that the applicant has made out a prima facie case for waiver of pre-deposit of amounts confirmed by the lower authorities. Application for waiver of pre-deposit of amount involved is allowed and recovery thereof stayed till disposal of the appeal. Issues:Waiver of pre-deposit of Service Tax amount.Analysis:The appellant had not discharged the Service Tax liability for a specific period, leading to confirmation of Service Tax by the Revenue. The appellant explained that they were not informed about the exemption available, resulting in the payment of Service Tax under a mistaken understanding of the law. The Tribunal noted that the option to avail the exemption was not exercised, but the payment was made under a mistaken belief. Despite this, the Tribunal found that the appellant had a prima facie case for waiver of pre-deposit, as the mistaken payment should not hinder an otherwise eligible benefit. Consequently, the Tribunal allowed the application for waiver of pre-deposit and stayed the recovery of the amount until the appeal's disposal.This judgment highlights the importance of understanding the legal provisions and exemptions related to Service Tax liabilities. It underscores the significance of exercising the option to avail exemptions correctly to avoid unnecessary payments. The Tribunal's decision to grant waiver of pre-deposit showcases a fair approach towards rectifying mistaken payments made due to lack of information or misunderstanding of the law. Overall, the judgment emphasizes the need for clarity and awareness regarding tax liabilities to prevent inadvertent financial burdens on taxpayers.