2022 (2) TMI 8

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..... 89-90 (SLM)/ST/JPR/2015 passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur, whereby he has disposed of two orders passed by the Deputy Commissioner and Additional Commissioner of Central Excise, Jaipur partly allowing the appeals of the assessee. In the impugned order, the learned Commissioner (Appeals) has upheld the confirmation of demand of service tax against the assessee on 'renting of immovable property' service. However, since there was an overlap of demands, confirmed through the two orders-in-original for the period 01.06.2007 to March 2009, he modified the demand by removing this duplicated amount. He has also set aside the penalties under Section 76, 77 and 78 of the Finance Act, 1994 upon the assessee hol....

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....oration - 2014 (33) S.T.R. 302 (T) wherein the identical issue has been dealt with. Further, it is held in the several cases, that even after there is suppression of fact and extended period is involved, the penalty can be waived. In this connection, I rely on the decision in the case of Raj Kumar Jain versus CCE, Jaipur - I - 2009 (13) S.T.R. 154 (T) and Sharvin versus CCE, Bhopal - 2008 (11) S.T.R. 630 (Tri. - Del.) wherein the demand has been confirmed but the penalty under Section 78 has been waived. Further, while deciding the question of law framed before the Hon'ble High Court of Madras in the case of Shri Suthan Promoters - 2010 (19) S.T.R. 646 (Mad.), it has been found that the court has taken the same view and waived the penalty u....

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....der may be dropped. 4. We have considered the arguments from both the sides and perused the records. 5. The appellant is an undertaking of the Government of Rajasthan and was formed for non-business/non-commercial purposes to provide finance to industries in the State of Rajasthan. Undisputedly, the appellant has been providing banking under the financial services as defined in Section 65 (12) which are taxable under Section 65 (105) (zm) of the Finance Act, 1994 and it has been paying service tax under this head. In addition, the appellant/assessee was also collecting rent on its immovable property let out for commercial use. The activity of renting of immovable property for use in the course of or furtherance of business or commerce....

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.... Rs. 1,60,814/- for the period of 01.06.2007 to March 2009. The amount of service tax has been adjusted accordingly. There is no dispute that there was an overlap of service tax demands and the same has been adjusted by the Commissioner (Appeals). 7. Learned counsel for the assessee asserts that they are only assailing the demand of interest. We find that demand of interest under Section 75 of Finance Act, 1994 is mandatory and the assessee has no escape from this liability. Neither does this Tribunal have the power to waive the demand under Section 75 of the Finance Act, 1994. This section reads as follows :- SECTION 75. Interest on delayed payment of service tax.- Every person, liable to pay the tax in accordance with the prov....

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....ssee's appeals, therefore, deserve to be dismissed. 9. So far as the appeal of the Revenue is concerned, it is only confined to waiver of penalties under Section 76, 77 and 78 upon the assessee invoking Section 80 of the Finance Act, 1994. We find Section 76, 77 and 78 provide for imposition of penalties. However, Section 80, as it stood during the relevant period read as follows :- "Penalty not to be imposed in certain cases. 80. Notwithstanding anything contained in the provisions of section 76, or section 77, 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. 10. Learned Commissioner (Appeals....

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....evenue wants the penalties imposed by the original authorities to be restored. 12. We have considered the submissions of the Revenue and the submissions made by the learned Counsel for the assessee in this regard. We fully agree with the Revenue that merely because an organization is formed by the Government it does not get any special treatment with respect to the provisions of service tax. It is as liable to pay service tax as any other assessee. For failures, it is as liable to penalties as any other assessee. No more, no less. This takes us that the next question as to whether the assessee, in the factual matrix of this case can be said to have proved that it had reasonable cause for failure to pay service tax. In this regard, we fin....