2011 (2) TMI 358

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....r of the Commissioner (Appeals) No.412/2010 dated 31.08.2010 by which the Commissioner (Appeals) has set aside the penalty of Rs.7,55,735/- imposed by the original authority on the respondent under Section 78 of the Finance Act, 1994. 2. Heard both sides. 3. The relevant facts, in brief, are that respondent is a manufacturer of cotton yarn who export to various foreign countries. They engage....

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....he Finance Act, 1994. The stay order by the Hon'ble High Court of Madras staying the operation of Rule 2(1)(d)(iv) relates to the period prior to introduction of Section 66A of the Act which cannot be the basis for bonafide belief by the respondent in not paying the service tax as recipients and, therefore, the Commissioner (Appeals) was wrong in setting aside the penalty. 5. Learned advocate f....

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....cumstances, he seeks upholding the order of the Commissioner (Appeals) in setting aside the penalty under Section 78. He also relies on the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs and Central Excise Vs Textile Corporation Marathwada Ltd., reported in 2008 (231) E.L.T.195 (S.C.). 6. I have carefully considered the submission from both sides and perused the re....

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....ection 66A was not in force may not apply to the period when Section 66A is in force, the belief entertained by the respondent cannot be held other than bonafide especially in the context of Revenue neutrality as the entire tax paid by them as recipient was available to them as credit. The respondents have not disputed the tax liability primarily on the ground that whatever service tax paid by the....