2010 (11) TMI 743 - AT - Service Tax

Penalty - appellant deposited the tax and interest immediately when the audit pointed out and that is coming out from the adjudication order itself. For some time past the taxability of particular receipt was under confusion for which the appellant was made to suffer. Considering such mitigating factor learned Commissioner (Appeals) waived the penalties imposed on the respondent under different provisions of the law. He had not found any mala fide on the part of the respondent. Under such circumstances levy of penalty is uncalled for, ground of mitigating factor and on the point of non-leviability the appeal of Revenue failed.

Summary

Issues:
1. Rejection of Revenue's stay application leading to the disposal of the appeal.
2. Tax liability of the respondent for not paying service tax on job charges.
3. Applicability of Business Auxiliary Service provider category for service tax.
4. Imposition of penalties on the respondent and waiver by the Commissioner (Appeals).
5. Legal provisions and grounds for rejecting the appeal of Revenue.

Analysis:
1. The judgment notes the rejection of the Revenue's stay application on 23rd October, 2009, leading to the disposal of the appeal due to this development. This procedural aspect sets the stage for the subsequent analysis of the case.

2. The case involves the respondent's failure to pay service tax on job charges received during a specific period. The respondent later discharged the tax liability, including Education Cess and interest, upon audit findings highlighting the tax obligation. The authorities categorized the service tax under the Business Auxiliary Service provider, citing relevant legal provisions introduced in 2005.

3. The judgment questions the taxation of the respondent when there was no applicable law during the material period. The respondent's cooperation in promptly paying the tax upon audit notification is highlighted, with the Commissioner (Appeals) acknowledging mitigating factors and waiving penalties due to the confusion surrounding the taxability of the receipt.

4. After hearing both sides and examining the record, the judgment delves into the legal provisions cited earlier. It emphasizes the mitigating factors and the non-leviability of penalties, leading to the conclusion that the appeal of the Revenue should fail based on these grounds.

5. The judgment concludes by reiterating the grounds for rejecting the Revenue's appeal, emphasizing the mitigating factors, non-leviability of penalties, and the legal provisions discussed throughout the analysis. The decision to reject the appeal is based on these considerations, providing a comprehensive overview of the case's legal intricacies and procedural history.