2019 (6) TMI 1618 - AT - Service Tax

Levy of penalty - payment of tax and penalty on being pointed out - renting of immovable property service - no suppression of facts - HELD THAT - The issue involved in this appeal is no more res-integra in view of the decision of the Tribunal in the case of R.K. REFRESHMENT ENTERPRISES (P) LTD. Versus COMMR. OF C. EX. 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 penalty imposed in the impugned order is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Non-payment of service tax on renting of immovable property service, imposition of penalty under Section 78.

Analysis:
The appellant, a five-star hotel, was found to have not paid service tax on renting of immovable property service for a specific period. After being informed, the appellant paid the due amount along with interest. A show-cause notice was issued, confirming the demand of service tax, interest, and imposing a penalty under Section 78. The Adjudicating Authority confirmed the demand, interest, and penalty. On appeal, the Commissioner (appeals) upheld the decision, leading to the present appeal before the Tribunal.

The appellant's counsel argued that the payment was made promptly upon realizing the liability, citing a bona fide belief that there was no service tax liability until a relevant judgment. The counsel contended that since the entire amount along with interest was paid, there was no basis for the imposition of a penalty. The counsel relied on various Tribunal decisions to support the argument.

The Revenue's representative supported the impugned order during the hearing.

The Tribunal noted that the issue had been previously addressed in the case of R.K. Refreshment & Enterprises and Sree Kanyacombines, where penalties were waived due to the contentious nature of the service tax liability on renting of immovable property. Based on these precedents, the Tribunal set aside the penalty imposed in the impugned order and allowed the appeal filed by the appellant with consequential benefits.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed and providing relief based on the precedents and the circumstances of the case.