2006 (6) TMI 481 - AT - Service Tax

Summary

Issues: Reduction of penalty under section 76 - Applicability of amnesty scheme for waiver of penal proceedings - Interpretation of relevant case law

In this case, the main issue revolves around the reduction of penalty imposed on the appellants under section 76. The Department appealed against the reduction of penalty by the Commissioner (Appeals), arguing that there is no discretion for such reduction under the law. The Tribunal analyzed the facts, including the appellant's timely payment of tax liability and interest, before the issuance of the show-cause notice. The Tribunal noted that the Government had introduced an amnesty scheme in September 2004, allowing waiver of penal proceedings for assessees who registered and discharged their tax liability within a specified period. Citing a relevant case law, the Tribunal held that those who paid the service tax and interest before October 30, 2004, were not liable for penalty. Based on this interpretation and the applicability of the amnesty scheme, the Tribunal found no merit in the Department's appeal and dismissed it.

Furthermore, the Tribunal explicitly stated that the ratio laid down in the case of Bharat Security Services applied to the present issue. Following this precedent, the Tribunal concluded that the penalty imposed on the appellants by the Commissioner (Appeals) should be set aside. Consequently, the Tribunal dismissed the appeal of the Revenue, upholding the decision to nullify the penalty imposed on the appellants.