2015 (10) TMI 1928 - AT - Service Tax

Waiver of levy of penalty u/s 76, 77 & 78 on the ground that the levy of penalty against the appellant on Mandap Keeper Service is concerned that would cause unreasonable hardship to the appellant. - Held That - Adjudicating authority considered existence of reasonable cause to exonerate the appellant from levy of penalty Found no deliberate intention to cause evasion; no penalty should be levied Adjudication order restored and decided in favour of the Appellant.

Summary

Issues:
1. Exoneration from levy of penalty under Section 76, 77, & 78 of the Finance Act, 1994.
2. Dispute regarding the levy of service tax on Mandap Keeper.
3. Restoration of the Adjudication order reversing the order of Commissioner (Appeals).

Analysis:

1. The appellant, M/s. Tiruchirapalli District Welfare Fund Committee, was established for the welfare of a specific category of people without any profit motive, with the Collector of the district serving as the ex-officio President. The Adjudicating authority acknowledged the cooperation of the ex-officio president in reducing litigation, as evidenced by the production of relevant documents and payment of the entire amount and interest after the show-cause notice. Consequently, the appellant was exonerated from the levy of penalty under Section 76, 77, & 78 of the Finance Act, 1994.

2. The dispute centered around the levy of service tax on Mandap Keeper services. The Adjudication order concluded that imposing a penalty on the appellant for this service would result in unreasonable hardship. Notably, no penalty was imposed on the Renting of Immovable Property Service by any lower authority. The appellant sought the restoration of the Adjudication order, arguing that the Commissioner (Appeals) erred in overturning it.

3. The Revenue supported the decision of the appellate Commissioner, but the Tribunal found merit in the appellant's argument. The Tribunal emphasized the precedent set by the apex court in a similar case regarding the constitutionality of levying service tax on Mandap Keepers. The Adjudicating authority's consideration of reasonable cause in exonerating the appellant from the penalty was deemed appropriate, especially given the involvement of the Collector as the ex-officio President. The Tribunal reinstated the Adjudication order, setting aside the appellate order, with the directive that any consequential relief should be granted in accordance with the law.

In conclusion, the judgment upheld the exoneration of the appellant from the penalty under the Finance Act, 1994, in light of the specific circumstances and legal considerations surrounding the levy of service tax on Mandap Keeper services.