9911796707
|
Home
Issues involved: Appeal against service tax demand, imposition of penalties, legitimate understanding of service tax liability, willful intention to evade tax.
Service Tax Demand and Penalties: The case involved an appeal against the service tax demand of &8377; 6,80,447/- for the period from 16.10.1998 to 31.6.1999, along with penalties imposed under Section 76 of the Finance Act. An additional order confirmed an amount of &8377; 57,210/- with a penalty of &8377; 100/- per day. The Commissioner (Appeals) set aside the penalties based on the belief that there was no willful intention to evade payment of service tax, considering the respondent's status as a cooperative society and their understanding of service tax liability. Legitimate Understanding of Service Tax Liability: The respondents, an Ex-servicemen Resettlement and Coordinate Cooperative Society, believed they were not liable for service tax during the relevant period due to their status as a cooperative society. They argued that they had a legitimate understanding that their services were not taxable, especially based on advice from M/s. ONGC. The Commissioner (Appeals) acknowledged this belief and set aside the penalties imposed, noting the lack of willful intention to evade tax. Willful Intention to Evade Tax: The revenue contended that the respondents' delay in discharging the service tax liability was not due to lack of knowledge but willful avoidance of tax. They argued that the respondents only paid the tax after receiving payment from M/s. ONGC, which was not legally justifiable. However, the Tribunal found that the respondents had a bonafide belief, as a cooperative society, that they were not required to pay service tax during the period in question. The Tribunal upheld the Commissioner's decision to set aside the penalties, emphasizing the lack of willful intention to evade tax. Conclusion: The Tribunal upheld the Commissioner's decision to set aside the penalties imposed on the respondents, considering their legitimate understanding of service tax liability as a cooperative society and the absence of willful intention to evade tax. The appeal against the service tax demand and penalties was rejected, affirming the Commissioner's order.
|
