2013 (9) TMI 289 - AT - Service Tax

Penalty on service tax u/s 76 - appellant paid service tax with interest thereon some time before issue of the show-cause notice. - Held that - No penalty under any of the provisions of the Act or the rules made thereunder shall be imposed in respect of payment of service-tax under the sub-section and interest thereon as per section 73(3) explanation (2) - Sub-section 3 enables a person to quantify the amount of service tax to be paid by him and to pay it up under intimation to Central Excise Officer - sub-section (3) restrains the Central Excise Officer from issuing any notice under sub-section (1) of section 3 to the assessee in respect of the amount of service tax paid by him - penalty is uncalled for and set aside - appeal allowed in the favour of the assessee.

Summary

Issues:
- Penalty imposed under Section 76 of the Finance Act 1994

Analysis:
The judgment delivered by the Appellate Tribunal CESTAT Bangalore involved an application seeking waiver and stay regarding a penalty imposed under Section 76 of the Finance Act 1994. The appellant had paid service tax with interest before the issuance of a show-cause notice dated 7/2/2012, covering the period from October 2010 to March 2011. The show-cause notice proposed a penalty, which was subsequently imposed by the adjudicating authority. The central issue in question was whether the penalty could be rightfully imposed on the appellant in this case. The Tribunal referred to explanation (2) to sub-section (3) of section 73 of the Act, which allows a person liable to pay service tax to quantify and pay the amount under intimation to the Central Excise Officer without the issuance of any notice under sub-section (1) of section 73. The explanation explicitly states that no penalty shall be imposed for such payment of service tax and interest thereon.

The Tribunal found the explanation to be clear and unambiguous, leading to the conclusion that the penalty imposed on the appellant was unwarranted. Consequently, the Tribunal set aside the impugned penalty and allowed the appeal. The stay application was also disposed of in light of the decision. The judgment emphasized the statutory provision and the absence of authority to impose a penalty in cases where service tax is paid under the specified conditions without the need for a notice. The decision provided clarity on the applicability of penalties in such circumstances, ensuring that the appellant was not unjustly penalized for complying with the payment requirements as per the Act.