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Issues involved: Appeal against waiver of penalties under Section 76 and Section 77 of Finance Act, 1994.
Summary: Issue 1: Waiver of penalties under Section 76 and Section 77 of Finance Act, 1994 The Revenue filed appeals against the waiver of penalties under Section 76 and Section 77 of the Finance Act, 1994. The grievance of the Revenue was that the breach of law should not go unpunished. The lower Appellate Authority had waived the penalties citing the genuine hardship faced by the Respondent due to the initial stage of implementation of the law. The Respondents had filed returns and deposited Service Tax before the show-cause notice was issued, indicating no intention to evade tax. The lower Appellate Authority considered the Respondents innocent as the implementation of the service tax law was new to them. After hearing both sides, it was decided that the order of the lower Appellate Authority should be upheld, and the Revenue's appeals were dismissed. In conclusion, the judgment upheld the lower Appellate Authority's decision to waive penalties under Section 76 and Section 77 of the Finance Act, 1994, considering the genuine hardship faced by the Respondents in the initial stage of implementing the law.
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