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Issues:
Service Tax computation correctness challenged by the appellant. Applicability of Service Tax on Godown charges. Bona fide belief exemption from Service Tax. Quantum of Service Tax calculation discrepancy. Penalty imposition justification. Analysis: The appellant contested the correctness of the Service Tax computation concerning O-I-A No. 07/2004-(T) S.T., dated 13-4-2004, in relation to their Kalyana Mantapam business. They argued that the Service Tax should only apply to income from letting out the Marriage Hall and Function Hall, not on Godown charges. The appellant provided detailed year-wise income statements supported by an affidavit, which the tribunal found credible. Consequently, the tribunal decided that the Service Tax should be levied solely on the income from the Marriage Hall and Function Hall, amounting to Rs. 1,23,000, resulting in a Service Tax of Rs. 8,775. This adjustment reduced the confirmed Service Tax from Rs. 25,029 to Rs. 8,775, and the penalty was also reduced to Rs. 5,000 based on precedents cited. The appellant contended that they were under a bona fide belief that they were exempt from Service Tax, thus challenging the penalty imposition. Relying on the tribunal's ruling in a similar case, it was argued that penalties should be reduced when the assessee demonstrates their bona fides. The tribunal considered the novelty of the Service Tax levy and the appellant's lack of awareness of its promulgation, leading to the conclusion that an exorbitant penalty was unjustified. In line with the judgments in the cases of CCE, Bangalore-III v. Impress Ad-Adis & Displays and Hindustan Steel Ltd. v. State of Orissa, the tribunal decided to reduce the penalty imposed, emphasizing the importance of bona fides in penalty considerations. The tribunal's decision was based on a thorough review of the facts and supporting documents, leading to a modification of the impugned order. By reducing the Service Tax amount and penalty, the tribunal addressed the discrepancy in the quantum of Service Tax and the justification for penalty imposition, ultimately disposing of the appeal in favor of the appellant.
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