2015 (12) TMI 957 - AT - Service Tax

Renting of immovable property services - Penalty u/s 76, 77 & 78 - Held that - Sub-section 2 of Section 80 provide that notwithstanding anything contained under the provisions of Section 76, 77 & 78, no penalty shall be imposable on failure to pay the Service Tax payable, as on 6th day of March, 2012, for the taxable service referred to under Section 65(105)(zzzz) subject to the condition that amount of Service Tax along with interest is paid in full within the period of 6 months from the date on which the Finance Bill received the ascent of the President. The reason for denying the benefit of sub-Section 2 of Section 80 as stated in the Order-in-Original, was only for short payment of interest of ₹ 3,734/-. However, there is no finding as to any default and the same on examination of the Order-in-Original appears to be difference in calculation by the appellant assessee as well as the Revenue. - denial of benefit under the provisions of Section 80(2) is bad and against the spirit of law Justification recorded by the Commissioner (Appeals) as to satisfaction of the service of the Order-in-Original is defective. Although the order was served on the son of the appellant, but the relevant fact is not on record as to whether the son is minor or major. Thus, the Commissioner (Appeals) have committed error in accepting the service of the Order-in-Original as proper. Moreover, the Order-in-Original itself is found to be bad and against the spirit of the Act and the Rules - Decided in favour of assessee.

Summary

Issues: Appeal against dismissal of appeal as time-barred, Denial of benefit under Section 80(2) of the Finance Act, 1994, Defective service of Order-in-Original

In this judgment by the Appellate Tribunal CESTAT MUMBAI, the appellant appealed against the order of the Commissioner (Appeals) dismissing the appeal as time-barred. The appellant, despite being absent, had filed written submissions requesting disposal of the appeal on merit. The appellant was required to pay Service Tax under the classification of Renting of immovable property services. A show-cause notice was issued demanding Service Tax, which the appellant admitted during adjudication. The appellant also provided evidence of payment of Service Tax along with interest and requested no penalty imposition. The adjudicating authority referred to Section 80(2) of the Finance Act, 1994, which states that no penalty shall be imposed if the Service Tax along with interest is paid in full within a specified period. The denial of benefit under this provision was due to a minor discrepancy in interest payment, which the appellant rectified upon notice. The Tribunal found the denial of benefit under Section 80(2) unjustified and against the spirit of the law.

Moreover, upon examining the Order-in-Appeal, the Tribunal noted that the justification recorded by the Commissioner (Appeals) regarding the service of the Order-in-Original was defective. The order was served on the appellant's son, but it was not clear whether the son was a minor or major, which is essential information. The Commissioner (Appeals) erred in accepting the service of the Order-in-Original as proper. Additionally, the Order-in-Original itself was deemed to be flawed and contrary to the Act and the Rules. Consequently, the Tribunal allowed the appeal and set aside the impugned order, ruling in favor of the appellant.