2010 (7) TMI 427 - AT - Service Tax

Penalty GTA service - appellant not challenged the service tax confirmed and the appeal was only against the confirmation of penalties - provisions of section 73(3) of the Finance Act 1994 applicable to the case of the appellant as there was no suppression collusion willful misstatement or fraud has been alleged on the appellant and in that circumstances benefit of section 80 of the Finance Act 1994 to be given to the appellant penalty waived

Summary

Issues:
Challenge to confirmation of penalty under sections 76 and 77 of the Finance Act, 1994.

Analysis:
The appellant contested the confirmation of penalties under sections 76 and 77 of the Finance Act, 1994. The case revolved around the liability to pay Service Tax on GTA Service post an amendment on Notification No. 36/2004-ST. The lower authorities upheld the confirmation of Service Tax, interest, and penalties. The appellant acknowledged the Service Tax liability but sought waiver of penalties under section 76, citing lack of awareness regarding the liability. They paid the duty liability, interest, and filed their service tax returns upon being informed by revenue officers during an audit. The appellant argued for the benefit under section 80 of the Finance Act, emphasizing the absence of suppression in the show-cause notice. The appellant also contended that the demand prior to 15-10-2007 was time-barred due to the absence of allegations of suppression beyond the extended limitation period.

The advocate for the appellant highlighted that the levy on GTA service commenced from 1-1-2005, and the appellant was unaware of their service tax liability. They asserted that as per section 73(3) of the Finance Act, 1994, no show-cause notice was necessary, and penalties should not be imposed. The appellant further argued that since there was no allegation of suppression against them, the penalties were unwarranted. On the other hand, the Departmental Representative (DR) contended that the appellant did not challenge the confirmation of service tax liability and admitted to the same, making the demand sustainable. The DR supported the impugned order regarding penalties.

The judgment noted that the appellant did not contest the confirmed service tax liability; hence, the appeal solely concerned penalties. The Tribunal upheld the confirmation of service tax liability. However, regarding penalties, it applied the provisions of section 73(3) of the Finance Act, 1994, as no suppression, collusion, willful misstatement, or fraud was alleged against the appellant. Consequently, the Tribunal granted the appellant the benefit under section 80 of the Finance Act, 1994, and waived the penalties under section 76. Thus, the appeal was disposed of based on these terms.