2012 (5) TMI 348 - AT - Service Tax

Construction services - abatement in terms of notification No. 15/04 and 18/05. - held that - no suppression or malafide can be attributed to the respondents. There were interim orders during the relevant period by the Hon ble High Court of Delhi which stand noted by the Commissioner (Appeals) in his order while extending the benefit of Section 80. - Penalty not to be imposed.

Summary

Issues:
1. Confirmation of demand of Service Tax against respondents without imposing penalty under section 80 of the Finance Act.
2. Inclusion of value of free supplied items by customers in the value of construction services for availing abatement.

Analysis:
1. The Appellate Tribunal, in the case at hand, addressed the issue of confirmation of demand of Service Tax against the respondents without imposing a penalty under section 80 of the Finance Act. The Tribunal noted that the respondents were engaged in providing construction services. The Commissioner confirmed the service tax against the respondents but did not impose a penalty, considering that the respondents had promptly paid the Service Tax upon being notified by the department, along with the interest amount, even before the issuance of a show cause notice. The Tribunal observed that the issue in question was not entirely settled and was subject to appeals before the Tribunal and various High Courts. It was clarified that the issue was not free from doubt during the relevant period. Additionally, interim orders by the High Court of Delhi during that period were considered, leading to the conclusion that no suppression or malafide intent could be attributed to the respondents. Consequently, the Tribunal found no fault in the Commissioner's decision not to impose a penalty, and the revenue's appeal was rejected.

2. The second issue addressed by the Tribunal pertained to the inclusion of the value of free supplied items by customers in the value of construction services for availing abatement. The Commissioner had denied such abatement, resulting in the confirmation of service tax against the respondents. However, the Commissioner refrained from imposing a penalty, taking into account various factors such as the immediate payment of Service Tax by the respondents upon notification by the department and the existence of doubts regarding the issue during the relevant period. The Tribunal further noted that the issue was unsettled and subject to appeals before different forums. Considering these circumstances, the Tribunal upheld the decision of the Commissioner not to impose a penalty on the respondents, ultimately rejecting the revenue's appeal.

In conclusion, the Appellate Tribunal's judgment in this case revolved around the confirmation of demand of Service Tax against the respondents and the decision not to impose a penalty under section 80 of the Finance Act. The Tribunal considered the specific circumstances, including the nature of the services provided, the prompt payment of taxes by the respondents, and the unsettled nature of the legal issue in question, leading to the rejection of the revenue's appeal.