2015 (12) TMI 87 - AT - Service Tax

Waiver of pre deposit - Penalty u/s 78 - Renting of immovable property service - Held that - according to the appellant, the Finance Bill was enacted on 28-5-2012. The penalty has been imposed on the ground that the payment was not made within six months. On going through Section 5 of the General Clauses Act, we find the date on which the enactment took place has to be omitted according to that Act and if that is omitted the appellant should have paid Service Tax with interest on or before 28-11-2012, which they have done. In view of the above, we find that appellants have made out a prima facie case for complete waiver of penalty during the pendency of appeal. Accordingly the requirement of penalty is waived and stay against penalty is granted during the pendency of appeal. - Stay granted.

Summary

Issues:
1. Appellant's failure to pay Service Tax and file returns.
2. Imposition of penalty under Section 78 of the Finance Act, 1942.
3. Claim of benefit under Section 80(2) of Finance Act, 1994.
4. Interpretation of the Finance Bill 2012 and its impact on penalty imposition.
5. Application of General Clauses Act to determine payment deadline.

Analysis:
1. The appellant, a private limited company engaged in jewelry business, leased out portions of commercial properties in Visakhapatnam but failed to pay Service Tax or file returns despite registration as a service provider. The appellant paid the entire Service Tax amount with interest on 28-11-2012, leading to penalty imposition under Section 78 of the Finance Act, 1942.

2. The appellant invoked Section 80(2) of the Finance Act, 1994, which provided a penalty waiver if the Service Tax along with interest was paid within six months from the date of enactment of the Finance Bill 2012. The appellant contended that the Finance Bill received assent on 28-5-2012, and they complied by paying before 28-11-2012. The tribunal analyzed the General Clauses Act to determine the payment deadline and found the appellant's compliance with the timeline, leading to a prima facie case for a penalty waiver.

3. Considering the enactment date of the Finance Bill and the appellant's payment timeline, the tribunal granted a waiver of penalty during the appeal's pendency, citing the appellant's fulfillment of the conditions specified in Section 80(2) of the Finance Act, 1994. The tribunal emphasized the importance of timely payment and the legislative intent behind penalty provisions in tax laws.

4. The tribunal's decision highlighted the significance of statutory interpretation and adherence to timelines specified in tax legislation. By applying the provisions of the Finance Act and the General Clauses Act, the tribunal ensured a fair and just outcome for the appellant, acknowledging their compliance with the statutory requirements for penalty waiver.

5. In conclusion, the tribunal's judgment provided clarity on the application of penalty provisions in tax laws, emphasizing the importance of timely compliance with payment deadlines and statutory requirements. The waiver of penalty during the appeal's pendency reflected a balanced approach to enforcing tax regulations while considering the appellant's adherence to the prescribed timelines.