Tribunal remands tax calculation, setting aside penalties, citing appellant's compliance and bona fide belief.

The Tribunal allowed the appeal, setting aside penalties and remanding the matter for recalculation of tax and interest based on a revised worksheet prepared by the appellant using customer service cards. The appellant's prompt registration and payment post-search, along with the lack of detailed customer service card copies for accurate calculation, were considered. The Tribunal recognized the appellant's compliance and bona fide belief regarding tax liability, leading to the decision to remand for recalculation without penalties.

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Issues:
Taxability of cable operator services, calculation of service tax liability, suppression of facts, applicability of penalty provisions, opportunity to prepare worksheet based on customer service cards.

Analysis:
The case involved a Cable Operator distributing services provided by City Cables, which became taxable from 16-8-2002. Following a search in 2003, the appellant registered and paid service tax based on their calculation of taxable receipts at Rs. 5,52,900. A subsequent show-cause notice in 2005 proposed a higher tax liability, leading to litigation. The matter was remanded to recalculate taxable receipts, resulting in a demand for Rs. 47,298 plus penalties.

The appellant argued they had no intention to evade tax, believing they were not required to register initially. They promptly paid the calculated amount post-search but lacked detailed customer service card copies for accurate calculation. The appellant contended no suppression occurred, invoking provisions of the Finance Act, 1994, for conclusion of proceedings without further notice. The Revenue argued the appellant had ample opportunity to calculate and pay correctly, emphasizing the second round of litigation and rejecting claims of missing customer service cards.

The Tribunal found merit in the appellant's arguments, noting their willingness to pay promptly and register, despite discrepancies in the initial calculation. Acknowledging the lack of detailed worksheets, the Tribunal directed the appellant to prepare a worksheet based on customer service cards to determine actual taxable receipts. Considering the appellant's compliance and the bona fide belief regarding tax liability, the Tribunal set aside penalties and remanded the matter for recalculation of tax and interest based on the revised worksheet. The appeal was allowed for remand in line with these observations.

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