2012 (6) TMI 216 - AT - Service Tax

Penalty u/s 76 - short payment of tax of Rs 6306 - dispute regarding calculation - Held that - Though original adjudicating authority has made a detailed verification of calculation, however appeal memorandum lacks the clarity. Therefore, having regard to the amount involved in the appeal which is very small, and financial hardships of assessee, penalty leviable u/s 76 is waived while demand of service tax and interest is upheld.

Summary

Issues: Dispute over service tax payment, penalty imposition under Section 76, invocation of powers under Section 80 for penalty waiver.

Dispute over service tax payment:
The appellant, engaged in providing security services and other taxable services, faced a dispute regarding service tax payment. The appellant had paid Rs. 33,093/- against a payable amount of Rs. 41,474/- for the period April to September 2006. The adjudicating authority confirmed a demand for service tax of Rs. 6,306/- with interest and penalty under Section 76. The appellant claimed no short payment, arguing that the rate of service tax was lower during the relevant period. Despite detailed calculations by the adjudicating authority, the appellant maintained there was no underpayment. The Tribunal received a letter from the appellant reiterating the claim of no short payment due to being from a poor, retired pensioner family.

Penalty imposition under Section 76:
The original adjudicating authority had passed a detailed order justifying the imposition of a penalty under Section 76 due to the alleged underpayment of service tax. However, the appellant contested this penalty, emphasizing the small amount involved, the lack of clarity in the appeal memorandum, and the circumstances of the case. The Tribunal noted the appellant's plea for a lenient view considering the financial situation and size of the appellant's business.

Invocation of powers under Section 80 for penalty waiver:
After considering the submissions and circumstances, the Tribunal invoked its powers under Section 80 of the Finance Act, 1994, to waive the penalty imposed under Section 76. Despite upholding the demand for service tax and interest, the Tribunal set aside the penalty, taking into account the small amount in question, the appellant's financial background, and the inability to reconsider the calculation due to the case's specific circumstances. The Tribunal deemed it a fit case for penalty waiver under Section 80.

This judgment showcases the meticulous consideration of the dispute over service tax payment, the rationale behind penalty imposition under Section 76, and the application of Section 80 for penalty waiver based on the unique circumstances and representations made by the appellant.