2012 (9) TMI 140 - AT - Service Tax

Penalty imposed u/s 76, 77 & 78 - renting of immovable property - Held that - No penalty shall be imposable for failure to pay service tax payable on the taxable service referred to in sub-clause (zzzz) of clause (105) of Section 65 subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President - As the appellants though initially contested the service tax liability but on 28.09.11 paid the entire amount of service tax liability as confirmed by the lower authorities along with interest case is squarely covered for non imposition of penalties under Section 80A - in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit of penalties on service tax liability for renting of immovable property services under Section 65(105)(zzzz) of the Finance Act, 1994.
2. Interpretation and application of Section 80A of the Finance Act, 2012 regarding penalties for failure to pay service tax under sub-clause (zzzz) of clause (105) of Section 65.

Analysis:
Issue 1:
The judgment deals with three stay petitions seeking the waiver of pre-deposit of penalties imposed on the appellants for their service tax liability related to renting of immovable property services. The appellants had already paid the entire amount of service tax liability along with interest. The Tribunal, after hearing both sides and perusing the records, decided to dispose of the appeals without the pre-deposit condition, as the issue was narrow. The counsel for the appellants argued that they had initially contested the service tax liability but later paid the entire amount along with interest. The Tribunal noted that there was no dispute regarding the discharge of the service tax liability by the appellants on a specific date.

Issue 2:
The judgment specifically discusses the provisions of Section 80A of the Finance Act, 2012, which states that no penalty shall be imposed for failure to pay service tax under sub-clause (zzzz) of clause (105) of Section 65, subject to the condition that the service tax along with interest is paid in full within a specified period. The Tribunal found that the appellants' case fell within the scope of Section 80A, which led to the conclusion that penalties imposed under Section 76, 77, and 78 were not applicable. Consequently, the penalties imposed on the appellants were set aside, and their appeals were allowed in this regard.

In summary, the judgment focused on the waiver of pre-deposit of penalties concerning service tax liability for renting of immovable property services and the application of Section 80A of the Finance Act, 2012, to determine the non-imposition of penalties under specific conditions. The Tribunal ultimately set aside the penalties imposed on the appellants based on the interpretation and application of relevant statutory provisions.