2015 (12) TMI 88 - AT - Service Tax

Demand of service tax - Security Agency Services - Imposition of penalty - Held that - Appellant had paid the service tax due alongwith interest, albeit after the investigations were started, but before issuance of show cause notice. In the facts and circumstances of the case as brought out hereinabove, it appears a fit case for waiving the penalties under the provisions of Section 80 of the Finance Act, 1994, due to the reasons advanced by the Proprietor of the appellant concern for the omissions and commissions. In view of the same, while upholding the impugned orders of the lower authorities, we set-aside the penalties imposed on the appellant - Decided partly in favour of assessee.

Summary

Issues involved:
Jurisdiction of officers for issuing show cause notice and demanding service tax, payment of service tax by the appellant's units at locations other than Ahmedabad, waiver of penalties under Section 80 of the Finance Act, 1994.

Jurisdiction of officers for issuing show cause notice and demanding service tax:
The appellant, a security agency service provider, operated from multiple locations but was registered for service tax only at Ahmedabad. The appellant collected service tax at other locations but failed to deposit it with the department. The appellant argued that officers from Ahmedabad Commissionerate had no jurisdiction over units at other places as they were independent. The appellant contended that they paid the service tax collected by units at other places, citing a manager's mental incapacity due to an accident. The bench noted the payment of service tax with interest before the show cause notice was issued. The tribunal upheld the impugned orders but waived penalties under Section 80 of the Finance Act, 1994, considering the circumstances and reasons presented.

Payment of service tax by the appellant's units at locations other than Ahmedabad:
The appellant had collected service tax at locations other than Ahmedabad but failed to deposit it with the department. The appellant's consultant argued that despite the issue, they paid the service tax with interest after investigations began, emphasizing the manager's incapacity due to an accident. The tribunal acknowledged the payment made by the appellant and considered it a fit case for waiving penalties under Section 80 of the Finance Act, 1994, based on the reasons provided by the appellant's proprietor.

Waiver of penalties under Section 80 of the Finance Act, 1994:
The appellant sought a waiver of penalties under Section 80 of the Finance Act, 1994, citing genuine reasons for the omissions and commissions related to the service tax collection and deposit. The authorized representative for Revenue argued that penalties were justified due to the appellant's failure to deposit the collected service tax on time. After considering both sides' arguments and reviewing the records, the tribunal found it appropriate to waive the penalties imposed on the appellant based on the circumstances and explanations provided by the appellant's proprietor.

This summary provides a detailed analysis of the issues involved in the legal judgment, covering the jurisdiction of officers, payment of service tax by the appellant's units at various locations, and the waiver of penalties under Section 80 of the Finance Act, 1994, as addressed in the tribunal's decision.