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Issues:
Waiver of pre-deposit of penalties under Sections 76, 77, and 78 of the Finance Act, 1994. Analysis: The case involves the appellants, M/s. Rajpaul Homes, seeking waiver of pre-deposit of penalties imposed on them under Sections 76, 77, and 78 of the Finance Act, 1994. The appellants were engaged in the construction of residential complexes during a specific period but failed to pay the due service tax. Upon the department pointing out their tax liability, the appellants paid the service tax along with interest. Subsequently, penalties were imposed under Section 76 for delay in payment, Section 78 for suppressing taxable service value, and an additional penalty for failure to furnish ST-3 returns. The Commissioner (A) upheld the penalties, stating that the appellants failed to prove the existence of a reasonable cause to vacate the penalties under Section 80 of the Act. Moving the stay application, the appellants' counsel referred to Section 73(3) of the Act, arguing that no Show Cause Notice was necessary and penalties were unjustified. The respondent argued against this, citing a tribunal decision that ignorance of the law was not a valid reason for relief under Section 80. The authorities maintained that the appellants had suppressed facts regarding taxable services, leading to the demand under Section 73(1) for a larger period. After reviewing the case and submissions, the judge found that there was no evidence of intentional evasion by the appellants. Notably, the appellants had paid the tax and interest well before the Show Cause Notice was issued. Consequently, the judge ordered the waiver of pre-deposit of the imposed penalties pending appeal, as there was no finding of deliberate tax evasion by the appellants.
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