2006 (1) TMI 612 - AT - Central Excise

Summary

Issues:
- Appeal against setting aside of penalties by Commissioner (Appeals) for failure to discharge service tax duty liability within time.
- Interpretation of Voluntary Disclosure Scheme for service providers.
- Consideration of leniency for new assessees in the initial stages of levy introduction.
- Comparison with similar case law regarding penalties for late registration and filing.

Analysis:
1. The judgment involves multiple appeals against the orders-in-appeal where penalties on all respondents were set aside by the Commissioner (Appeals) for failing to discharge their duty liability towards service tax and interest within the specified time.

2. The Revenue contested the orders-in-appeal, arguing that penalties should have been upheld. The Commissioner (Appeals) based the decision on the Voluntary Disclosure Scheme, granting immunity from penal action to service providers who had not registered but paid the service tax with interest within the stipulated period.

3. The Commissioner (Appeals) considered the historical leniency towards new assessees facing procedural delays in registration and compliance with the service tax law. Referring to the Extraordinary Taxpayer Friendly Scheme, the Commissioner highlighted the waiver of penalties for non-compliant assessees, questioning the denial of similar benefits to law-abiding assessees who registered and paid taxes promptly.

4. Citing a precedent from a similar case, the judgment mentioned a Tribunal decision in CCE v. Bharat Security Services & Worker's Const., where the Tribunal dismissed Department appeals on grounds akin to the present case, reinforcing the lenient approach towards penalties for procedural delays.

5. Ultimately, the Judicial Member found no fault in the Commissioner (Appeals)'s decision to set aside penalties, aligning with the historical leniency towards new assessees and the rationale behind the Voluntary Disclosure Scheme. Considering the established case law and the circumstances, the appeals were dismissed, upholding the decision to waive penalties for the respondents.