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2019 (7) TMI 1772 - AT - Service TaxWaiver of penalty u/s 78 and 77(1)(d) of the Finance Act, 1994 - non-payment of service tax - security deposit / renting of immovable property - HELD THAT - Originally the show cause notice was issued for an amount of ₹ 2,92,493/-. Subsequently the adjudicating authority has confirmed the demand of ₹ 1,16,381/- and ₹ 36,479/- which is quite less than the original demand. On perusal of the records it is observed that the appellant has paid the entire demand much before the issuance of the show cause notice. Interest has also been deposited. The issue involved in this appeal is no more res integra in view of the decision of the Tribunal in the case of M/S R.K. REFRESHMENT AND ENTERPRISES (P) LTD, M/S R.K. ASSOCIATES AND HOTELIERS (P) LTD VERSUS CCE RAIPUR 2018 (2) TMI 1412 - CESTAT NEW DELHI where it was held that though the said sub-section was basically with reference to renting of immovable property service, the main Section 80 is still available to the appellant considering that the tax liability under renting of immovable service was subject matter of various disputes, amendments, including retrospective amendment. As such, the penalty imposed on this service is waived invoking provisions of Section 80. The penalties imposed under section 78 and 77(1)(d) are set aside - Appeal allowed - decided in favor of appellant.
Issues involved:
Waiver of penalty under section 78 and section 77(1)(d) of the Finance Act, 1994. Analysis: The case involved a dispute regarding the waiver of penalties imposed under section 78 and section 77(1)(d) of the Finance Act, 1994. The appellant, a company, was issued a show cause notice for alleged non-payment of Service Tax under 'Renting of Immovable Property Service' and 'security deposit/renting of immovable property' for the financial years 2010-11 and 2011-12. The adjudicating authority confirmed a demand of certain amounts as Service Tax, interest, and penalties. The appellant had paid the demanded amounts before the notice was issued. The appellant's advocate argued that the non-payment was due to clerical error and not an intentional evasion of tax. It was contended that there was no fraud or willful attempt to evade tax, and the appellant had paid the entire amount along with interest. The authorized representative for the Revenue reiterated the orders. The Tribunal noted that the appellant had paid the entire demand before the show cause notice was issued and that the issue was no longer res integra based on previous Tribunal decisions. Citing the case law of R.K. REFRESHMENT & ENTERPRISES (P) LTD. and SREE KANYACOMBINES, the Tribunal highlighted that penalties under section 78 and 77(1)(d) could be waived if the appellant proved a reasonable cause for the failure to pay tax. The Tribunal found that the penalties imposed on the appellant were not sustainable as there was no allegation of fraud or willful misstatement, and the failure to pay tax was due to the contentious nature of the issue. Therefore, the penalties under section 78 and 77(1)(d) were set aside, and the appeal was allowed with consequential benefit. In conclusion, the Tribunal allowed the appeal, setting aside the penalties imposed under section 78 and section 77(1)(d) of the Finance Act, 1994. The decision was based on the appellant's timely payment of the demanded amounts, absence of fraudulent intent, and previous Tribunal decisions supporting the waiver of penalties in similar cases.
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