TaxTMI 
TaxTMI 
2014 (10) TMI 483
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....ation certification and did not claim refund of the amount. 2.2. The assessee, subsequently, entered into a contract of service with BPL and ICICI to do back office work. Unaware of the taxability of the said service, the assessee did not get itself registered for this service. The department taking note of the fact that the assessee had neither paid service tax for such services rendered nor registered with the department under the category of Business Auxiliary Service , issued a letter dated 17.6.2005, calling upon the assessee to pay service tax of Rs. 4,28,461/- and educational cess of Rs. 7,037/- under the category of Business Auxiliary Service for the back office support rendered from 1.6.2004 to 31.3.2005 along with interest. The assessee immediately applied for registration certificate for addition of category Business Auxiliary Service and they were issued such registration certificate on 4.8.2005. In response to the letter dated 17.6.2005 issued by the Department, the assessee initially paid certain amount. 2.3. Thereafter, the department issued a show cause notice in C.No.IV/16/213/2005-STC, dated 7.11.2005 (despatched on 18.11.2005). A reply was submitted by the asse....
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....aid under Section 76 of the Finance Act, 1994. I also impose a penalty of Rs. 1,000/- (Rupees one thousand only) under section 77 of the Finance Act, 1994. I impose a penalty of Rs. 4,09,702/- (Rupees four lakhs nine thousand seven hundred and two only) under section 78 of the Finance Act, 1994. 2.4. Aggrieved by the said order, the assessee filed an appeal to the Commissioner (Appeals), who, after considering the payment of service tax and interest, upheld that the imposition of penalty under Sections 76 and 77 of the Finance Act, 1994. However, he set aside the penalty imposed under Section 78 of the Finance Act, 1994 holding as follows: "4.4. Further, the lower authority, imposed penalty under Section 78 of the Act, merely on the fact that the appellants had not discharged the tax liability at the appropriate time. Mere failure to pay the tax liability alone is not a sufficient ground to prove that the appellants had suppressed facts and that there was an intention to evade the payment. To invoke the penal provisions of this section, any one of the following should be present: a) Fraud or b) Collusion or c) Willful mis-statement or d) Suppression of facts or e) Contrave....
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....lures found against them. The findings of the appellants' bona fide conduct is also fortified by the record of their conduct. They had registered themselves as an assessee in 2003 for an activity which was not liable to service tax and paid an amount of Rs. 3.86 lakhs, refund of which they had not claimed from the Department. Section 80 of the Finance Act, 1994 reads as follows: '80. Notwithstanding anything contained in the provisions of Section 76, Section 77, Section 78 or Section 79 , no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure.' I am inclined to waive the penalties against the appellants as provided in Section 80 of the Finance Act, 1994. In the circumstances, the impugned order is set aside. The appeal is allowed." 2.7. The Tribunal, in the appeal filed by the Department challenging the deletion of penalty imposed under Section 78 of the Finance Act, 1994, followed the above decision rendered by it on 29.1.2007 in the assessee's appeal and dismissed the appeal of the Department holding that there is no case to restore the p....
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....ance Act, 1994 makes it clear that penalty is leviable, if service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of (a) fraud; or (b) collusion; or (c) willful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the Rules with an intent to evade payment of service tax. 6.2. In the case on hand, the assessee has clearly stated that they had originally got a registration certificate for house keeping and realizing that the said service is not taxable, they have surrendered the same. It may be emphasized here that the assessee had, in fact, paid duty even when there was no requirement under law and has not even chosen to claim refund till date. Even in respect of the present demand, on receipt of notice from the department about the liability of service tax in respect of back office work, they have paid the service tax and interest even before adjudication. This only goes to show that the assessee had no intention to evade payment of tax and non payment was due to lack of knowledge and awareness. 6.3. That apart, one another factor which enures to the benefit ....