TaxTMI 
TaxTMI 
2010 (7) TMI 414
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....natural justice, confirmed the demand of Service Tax amounting to Rs. 3,55,832 under section 73(2) of the Finance Act, 1994 along with interest of Rs. 40,736 under section 75, imposed penalty of Rs. 100 per day under section 76, Rs. 500 under section 77 and equivalent penalty of Rs. 3,55,832 under section 78 of the Finance Act, 1994. The Service Tax amount of Rs. 3,46,456 along with interest of Rs. 40,736 paid by the assessee before issue of show-cause notice, was appropriated towards adjudicated levies and the balance Service Tax amount of Rs. 9,376 was paid subsequent to issue of show-cause notice. The assessee is challenging the imposition of penalty inter alia on the ground that service tax and interest were paid before issue of show-cause notice; that the delay in payment of Service Tax was due to ignorance of law and that immediately on realising the mistake, the Service Tax along with interest was paid before issue of notice and in such case, no penalty is imposable as clarified by the Board vide Circular F.No. 341/18/2004-TRU, dated 17-12-2004 and as held in various judicial pronouncement, by citing certain case laws. 4. Aggrieved by such an order, the assessee preferred....
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....ed. It is also on record that the assessee herein had paid the Service Tax amount of Rs. 3,46,456 along with interest of Rs. 40,736 before the issuance of show-cause notice and the balance amount of Rs. 9,376 was paid subsequent to the issue of show-cause notice. The counsel submits that the Service Tax on the Packaging Services is paid. I find that the issue involved in this case is regarding the payment of Service Tax on the Goods Transport Agency during the relevant period. The Service Tax liability on the services was in nascent stage and there was lot of confusion as to who has to discharge the service tax. I find that the co-ordinate Bench of this Tribunal, in an identical case in Busy Bee (supra), has held as under :- '4. I have carefully studied the case records and considered the submissions made by both sides. It is obvious from the findings of the lower appellate authority that the appellants had committed the transgressions owing to their ignorance of the legal provisions. I am satisfied that the assessee had satisfactorily established that there was reasonable cause for the failures found against them. The findings of the appellants' bona fide conduct is also fortif....
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....e tax being a new levy the Tribunal had vacated penalties imposed under section 78 of the Finance Act in a case of out-door caterer not registering with the department and not paying tax. The Tribunal had vacated the penalty in view of the provisions of section 80. Section 80 provides for not imposing penalties in cases where there is sufficient cause for the failure of the assessee to follow the statutory formalities. The instant case is a fit one to grant relief provided under the above section. Accordingly, I allow this appeal and vacate penalties imposed on the appellant." 7.2 Further, I find that the Division Bench of this Tribunal, in the case of Vista Infotech (supra), has held as under : '5. We have considered the submissions made by both sides and perused the records. We find that there is no dispute that the appellant had been discharging the service tax liability on the services rendered by him during the period from January, 2004 to December, 2006. During the relevant period i.e., from January, 2007 to June, 2007, the appellant had failed to discharge the service tax though he had collected the same from the customers. The appellant's representative had explain....
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....ccordingly, conclusion of proceeding in terms of sub-section (1A) and (3) of section 73 implies conclusion of entire proceedings under the Finance Act, 1994." It can be seen from the above reproduced Board's Circular, it is clarified that no show-cause notice will be served on the defaulter, provided the taxpayer discharged the service tax liability along with interest, and the proceedings remain concluded. 6. We find that this Bench in the case of Vee Aar Secure (supra) has held as under :- "5. On a very careful consideration of the entire matter, we find that in the case law of Karnataka High Court, cited by the learned SDR, the High Court actually upheld the order of the original authority imposing penalty. In this case also, in our view, the case law does not help the revenue. In the present case, the original authority has given a reasoning for waiver of penalty in exercise of his powers under section 80 of the Finance Act, 1994. There was actually no mala fide and intention to evade payment of service tax. Once the lapse was pointed out, the appellants discharged the service tax liability along with interest. This fact has been taken into account by the lower authori....