2008 (5) TMI 30 - AT - Service Tax

Agent - Business Auxiliary Services - benefit of the Amnesty Scheme (announced by the Government under Extra Ordinary Tax Payer Friendly Scheme) was availed by the appellants and they have paid the Service Tax along with interest, therefore, they submit that they are entitled for waiver of penalty since assessee have utilized the scheme, they are not required to pay penalty - payment of tax along with interest is confirmed and penalty is set aside by allowing the appeals to this extent only

Summary

Issues: Applicability of Amnesty Scheme to waive penalty for appellants acting as agents for a company under 'Business Auxiliary Services'.

Analysis:
1. Issue of Applicability of Amnesty Scheme: The main issue in all three appeals before the Appellate Tribunal was the applicability of the Amnesty Scheme for waiver of penalty. The appellants, acting as agents for a mobile company, were covered under 'Business Auxiliary Services' and had availed the benefit of the Amnesty Scheme to pay the Service Tax along with interest. They contended that they should be entitled to a waiver of penalty, which the authorities below had not granted. The Tribunal considered the submissions and noted that the appellants were not disputing the Service Tax liability but were seeking the benefit of the Amnesty scheme. Citing precedents where penalty was set aside under similar circumstances, the Tribunal held that since the appellants had paid the Service Tax along with interest, the penalty should be waived in line with the Amnesty Scheme.

2. Verification of Interest Payment: The Tribunal addressed the concern raised by the learned SDR regarding the deposit of interest by the appellants. The lower authorities were directed to verify whether interest had been deposited, as the appellants' counsel asserted that interest had indeed been paid in all cases. The Tribunal emphasized the importance of ensuring compliance with interest payment obligations to validate the appellants' claims.

3. Confirmation of Service Tax and Interest Payment: After reviewing the details of payments provided by the appellants' counsel, the Tribunal confirmed that the Service Tax along with interest had been paid in all cases. This confirmation played a crucial role in the Tribunal's decision to set aside the penalty, as the appellants had fulfilled their financial obligations under the Amnesty Scheme.

4. Decision and Conclusion: In the final order, the Tribunal allowed the appeals to the extent of confirming the payment of Service Tax along with interest and setting aside the penalty. By aligning the decision with the principles of the Amnesty Scheme and established precedents, the Tribunal ensured a fair and consistent application of tax laws in the context of Business Auxiliary Services. The judgment emphasized the importance of compliance with tax obligations while recognizing the benefits available under government schemes to encourage voluntary tax payments.