2015 (11) TMI 526

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....s under: (i) the demand of service tax of to Rs. 9,10,592 was reduced to Rs. 6,20,019/- which (ii) Penalties under Section 77 and 78 in respect of service tax on renting of immovable property service was waived in terms of Section 80(2) of the Act. (iii) Penalty of Rs. 1,91,924/- related to demand on Intellectual Property service was upheld. 2. The appellant filed present appeal for setting aside the impugned order but during the hearing it was categorically stated by the Ld. Counsel Shri. Ganesh K.S. Iyer that they are not contesting the service tax demand and interest thereon confirmed by the Ld. Commissioner and payment thereof already made by the appellant. The appellant now contesting only penalty of Rs. 1,91,924/- imposed ....

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....e belief that since the VAT has been paid on the entire amount of agreement the said use of goodwill shall not be liable for service tax. On this fact, appellant was under bonafide belief that the services is not taxable. He submits that appellant bonafidely entered into agreement and recorded the payment transaction in their books of account which clearly shows that appellant had no malafide intention to evade service tax on the services of Intellectual property. In view of this fact, he prays that penalty of an amount of Rs. 1,91,924/- imposed under Section 78 may be waived by invoking Section 80 of the Finance Act, 1944. 4. Shri. S.R. Nair, Ld. Examiner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned ....

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....espect of the penalties imposed". The appellant in para 15 of their ground of appeal before the Commissioner (Appeals) stated as under: 15.0 Waiver under Section 80 15.1 Notwithstanding and without prejudice to the grounds as above it is submitted that the appellant is entitled for waiver of penalty under Section 80 of Finance Act, 1994. Section 80 is invokable since the appellant was always under the bonafide belief that their activities are not subject to service tax. Bonafide belief has been held to be fit reason for setting aside penalty under Section 80 in the following case laws. ETA Engineering Limited Vs. CCE 2004 174 ELT 19(Tri. LB) Ada Ranga Mandira Trust Vs. CCE 2007 6 STR 381(Tri Bang.) From the above recording....