2016 (1) TMI 440 - AT - Service Tax

Levy of penalty u/s 77(1)(c) for failure to furnish the records before the Audit Party - appellant urges that the letter dated 6/2/12 is vague as it does not state which particular document is required - Held that - although there was some confusion as the document desired was financial statement/documents , not specifying the particular document, the same led to confusion with the appellant in making timely compliance - there is some element of negligence on the part of the appellant also. - the bone of contention, that is applicability of notification number 12/2003 has been decided in favour of the appellant by the Commissioner (Appeals). The appellant have already deposited penalty of ₹ 10,000/- imposed on the director and not appealed further. It is an admitted fact that the documents required were ultimately filed at the time of personal hearing of the show cause notice - taking a liberal view, penalty set aside. - Decided in favor of appellant.

Summary

Issues: Appeal against penalty imposed under sections 77 (1) (c) (ii) of the Finance Act, 1994 for non-compliance with service tax regulations.

Analysis:
1. Facts and Background: The appellant, M/s Drooly's Catering Pvt. Ltd., challenged the penalty of Rs. 67,000 imposed by the Commissioner (Appeals) for not depositing service tax on taxable services received during 2010-11. The appellant was repeatedly asked to provide financial documents for verification but failed to comply, leading to the penalty.

2. Contentions of the Appellant: The appellant argued that the initial request for documents was vague, causing confusion. They contended that they later provided the specific document during the personal hearing, showing willingness to comply. The appellant also cited a previous appeal where they were granted benefits under notification number 12/2003, supporting their compliance with tax regulations.

3. Revenue's Position: The Revenue maintained that despite multiple notices and summons, the appellant did not clarify or fulfill the document requests promptly. They argued that the penalty was justified due to the appellant's lack of cooperation.

4. Judgment: The Tribunal acknowledged the confusion caused by the vague initial request for documents but noted the appellant's negligence in timely compliance. However, considering the appellant's eventual submission of the required documents and the previous favorable decision under notification 12/2003, the penalty on the company was set aside. The Tribunal also highlighted that the director had already paid the imposed penalty and did not appeal further.

5. Conclusion: The Tribunal allowed the appeal, granting the appellant consequential benefits as per the law. The judgment emphasized the importance of timely compliance with tax regulations and the significance of providing requested documents promptly to avoid penalties.