2006 (12) TMI 517 - AT - Service Tax

Summary

Issues involved:
The issue involved in this case is the service tax liability on the appellants for On Line information as Data Base Access and retrieval services, specifically regarding the payment of service tax on one-time charges collected from customers.

Service Tax Liability and Penalties:
The appellants had registered as providers of the services in question and were paying service tax on amounts collected from customers, but had not paid tax on one-time charges. After being notified by the Revenue, the appellants paid the tax and interest. The Revenue issued a show cause notice for penalties under Sections 76 and 78 of the Finance Act, 1994. The adjudicating authority and the Commissioner (Appeals) upheld the penalties. The appellants did not dispute the tax and interest liability but challenged the imposition of penalties, citing a friendly scheme for service tax introduced by the Government of India. The Tribunal found that the appellants had paid the tax and interest before the scheme's deadline, similar to a previous case, and ruled in favor of the appellants, setting aside the penalties.

Decision and Precedents:
The Tribunal upheld the tax and interest liability but set aside the penalties under Sections 76 and 78, citing precedents where penalties were waived for timely payment of tax under a friendly scheme. The Tribunal found that the appellants were covered by the scheme and were not liable for penalties. The decision was based on the appellants' compliance with the tax payment requirements before the scheme's deadline. The Tribunal dismissed the appeals, following the precedent set in previous cases. The impugned order imposing penalties was set aside, and the appeal was allowed with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellants, setting aside the penalties imposed under Sections 76 and 78 of the Finance Act, 1994, due to the appellants' compliance with the tax payment requirements before the deadline set by the friendly scheme. The decision was based on the appellants' timely payment of tax and interest, aligning with the provisions of the scheme.