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2006 (11) TMI 25 - AT - Service TaxPenalty(Service tax)- Chartered Accountant services- Alleged that appellant were made delay in payment of service tax and accordingly penalty imposable- After considering the fact penalty were set aside
Issues:
Imposition of penalty for delayed service tax deposit. Analysis: The appeal was filed against an order-in-appeal that upheld the imposition of a penalty equivalent to the service tax amount due to delayed deposit. The appellant admitted to delaying the deposit of service tax for specific quarters. The appellant's representative argued that the penalty imposition was challenged, citing unintentional oversight due to lack of supervision during the relevant periods. The appellant requested leniency under Section 80 of the Finance Act, 1994. The Departmental Representative contended that the penalty was justified as the appellant should have been aware of the service tax liability timeline. After considering both sides' arguments and reviewing the records, it was noted that the appellant self-discovered the non-payment error and promptly settled the service tax liability before any revenue intervention. The appellant also paid the interest due on the unpaid tax amount. The registration under the Finance Act, 1994 for providing Chartered Accountant services was obtained promptly upon introduction. Despite initial challenges to the imposition of service tax on such services, the appellant complied with the tax requirements. The Tribunal accepted the appellant's argument that the infraction was unintentional and thus warranted leniency under Section 80. Consequently, the penalty imposed under Section 76 was set aside, and the appeal was allowed. This judgment highlights the importance of self-identification and rectification of errors in tax compliance, as well as the significance of timely payment of service tax liabilities. It also underscores the relevance of demonstrating unintentional infractions and reasonable cause for leniency in penalty imposition under the relevant legal provisions.
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