2014 (6) TMI 800 - AT - Service Tax

Waiver of penalty invoking section 80 - courier service - delayed payment of service tax with interest - Held that - The very fact that the matter went right up to the Supreme Court and finally it was decided against the assessee shows that assessee definitely felt that they had a case for non-payment of service tax. That being the position, I am unable to agree that there was willful intention on the part of the assessee not to comply with tax liabilities. - Decided against the revenue. Decision on cross objection filed by assessee - Held that - Even though the cross-objection has not been numbered and not listed, the learned advocate insisted that the same should be considered as an appeal filed by them. - in the interest of justice, tribunal proceeded with to deal with the issue raised by the learned counsel. Extended period of limitation - disputing the demand in the cross objection - Held that - in the returns filed, the details were not submitted and the appellants had given the details only on 9.8.2005. After the Supreme Court decision was received, it would be natural for the department to expect that assessee would pay the service tax but when they did not pay, notice has been issued. - Once the assessee is required to do assessments and pay the tax, it cannot be said that he is not aware of the obligation of self-assessment and the consequence of its failure to follow the law. - Decided against the assessee.

Issues:
1. Imposition of penalty under Section 76 of the Finance Act 1994 on the appellant for non-payment of service tax.
2. Consideration of reasonable cause for delay in payment of tax and invocation of Section 80 of the Finance Act.
3. Whether the delay in payment of service tax was willful or due to genuine financial difficulty.
4. Consideration of time-barred demand and invocation of extended period for issuing show-cause notice.
5. Compliance with statutory requirements and self-assessment obligations by the appellant.
6. Applicability of previous decisions allowing the ground of limitation to be raised at any stage.

Issue 1:
The dispute revolved around the imposition of a penalty under Section 76 of the Finance Act 1994 on the appellant for not paying service tax despite a Supreme Court decision. The Commissioner (Appeals) set aside the penalty invoking Section 80 of the Finance Act, leading to an appeal by the Revenue. The Revenue contended that the delay in payment showed the appellant's willful intention to evade tax obligations, while the Commissioner disagreed, citing a reasonable cause for the delay.

Issue 2:
The appellant argued that the delay in payment was due to financial difficulty and a genuine doubt about the taxability of the service, even after the Supreme Court's decision. The Commissioner found that the delay was under a bonafide belief that tax was not payable, hence invoking Section 76 was not justified. The Commissioner upheld the decision not to impose a penalty by invoking Section 80 of the Finance Act.

Issue 3:
The Tribunal considered whether the delay in payment of service tax was intentional or due to genuine financial difficulty. The appellant claimed financial constraints and a lack of tax collection as reasons for the delay, which the Tribunal found plausible. The absence of specific allegations of intention to evade duty or suppression of facts in the show-cause notice supported the appellant's argument of a reasonable cause for the delay.

Issue 4:
The Tribunal addressed the argument of a time-barred demand and the invocation of the extended period for issuing the show-cause notice. The appellant contended that the demand and interest were time-barred as the show-cause notice did not invoke the extended period. However, the Tribunal rejected this argument, emphasizing the obligation to implement final decisions and comply with tax liabilities as per the Supreme Court ruling.

Issue 5:
The Tribunal analyzed the appellant's compliance with statutory requirements and self-assessment obligations. It noted that the appellant failed to submit details of amounts received for services rendered until after the Supreme Court decision, indicating a lack of fulfillment of statutory obligations. The Tribunal highlighted the self-assessment regime, emphasizing the importance of being aware of tax obligations and following the law to avoid disputes and litigation.

Issue 6:
The Tribunal considered the applicability of previous decisions allowing the ground of limitation to be raised at any stage. It clarified that such decisions were in cases of appeals filed by parties and not cross-objections, as in the present case. The Tribunal concluded that the previous decisions were not applicable due to the different nature of the current appeal filed by the Revenue.

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