2011 (1) TMI 346 - AT - Service Tax

Penalty - Rectification of mistake - The respondent/assessee has discharged the entire service tax liability before the issuance of show-cause notice - It is borne out from the records - The assessee has deposited the amount on 5-5-2008 while the show-cause notice has been issued on 8-7-2008 - If that be so their coming forward and depositing the entire amount of service tax along with interest would get covered by the provisions of section 73(3) of the Finance Act 1994 which mandates the revenue officers not to issue any show-cause notice - Find that the provisions of section 80 can be invoked in this case there being reasonable cause for non-imposition of penalty on the assessee - Decided in favour of assessee.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of penalties involved.
2. Dispute regarding service tax liability on SWIFT charges.
3. Appeal against order-in-appeal setting aside demand for a specific period.
4. Cross-objection filed by the assessee against penalties imposed.
5. Withdrawal of appeal by the revenue.
6. Application for invoking provisions of section 80 of the Finance Act, 1994.

Stay Petition and Disposal of Appeal:
The stay petition was filed for the waiver of pre-deposit of penalties involved. The Tribunal found that the appeal itself could be disposed of at that juncture. The application for waiver of pre-deposit was allowed, and the appeal was taken up for disposal.

Service Tax Liability Dispute:
The Revenue authorities contended that the assessee was liable to discharge service tax liability on SWIFT charges for a specific period. The Adjudicating Authority confirmed the demand for part of the period in question. The assessee challenged the orders before the ld. Commissioner (Appeals), who partially set aside the demand. Subsequently, the assessee filed an application for rectification of mistake, which was dismissed. The assessee then appealed before the Tribunal, and the stay petition was allowed.

Cross-objection and Withdrawal of Appeal:
The revenue appealed against the order that dropped the demand for a certain period. The assessee filed a cross-objection for the penalty imposed for a different period. The revenue sought approval from the Committee on Disputes for the appeal but later filed a miscellaneous application for withdrawal of the appeal. The Tribunal allowed the withdrawal of the revenue's appeal and dismissed it as withdrawn. The cross-objection by the assessee was considered, and the penalties were set aside by invoking section 80 of the Finance Act, 1994.

Invocation of Section 80 of the Finance Act, 1994:
The Tribunal noted that the assessee had discharged the entire service tax liability before the issuance of the show-cause notice. As the assessee did not dispute the liability for a specific period and had deposited the amount before the notice, the provisions of section 73(3) applied. Section 80 was invoked due to reasonable cause for non-imposition of penalty, and the penalties were set aside.

Conclusion:
The Tribunal allowed the cross-objection by the assessee, setting aside the penalties imposed. The revenue's appeal was withdrawn, and the appeal by the assessee was dismissed as withdrawn. The invocation of section 80 of the Finance Act, 1994, played a crucial role in setting aside the penalties in the case.