2007 (5) TMI 220 - AT - Service Tax

Enhancement of penalty by commissioner Appellant, Architect failed to pay the Service Tax within the stipulated time - as per Extra Ordinary Tax Payer Friendly Scheme, any person who will discharge Service tax liability and interest before 30th October 2004 will not be penalized - appellant has deposited the entire amount of Service Tax and interest thereof by 1st March 2004 so order of commissioner is set aside and Assessee s appeal is allowed

Summary

Issues:
1. Applicability of the threshold limit of Rs. 50,000 in Service Tax cases.
2. Imposition of penalty under Section 76 and Section 77 of the Finance Act, 1994.
3. Enhancement of penalty by the Revisionary Authority.
4. Compliance with the Extra Ordinary Tax Payer Friendly Scheme.
5. Deposit of entire amount of Service Tax and interest by a specified date.

Analysis:
1. The judgment begins by addressing the issue of the threshold limit of Rs. 50,000 in Service Tax cases. It clarifies that this limit does not apply to any matter of Service Tax. As a result, the show cause notice is discharged, and the stay application is taken up for disposal.

2. Moving on to the imposition of penalties, it is noted that the appellant, an Architect registered as a service provider, failed to pay Service Tax for a specific period. The adjudicating authority imposed penalties under Section 76 and Section 77 of the Finance Act, 1994. Subsequently, the Commissioner enhanced the penalty as a Revisionary Authority. The Tribunal finds that the issue is within a narrow compass, focusing on the challenge to the penalty imposition.

3. The judgment discusses the Central Government's Extra Ordinary Tax Payer Friendly Scheme, designed for unregistered individuals not paying Service Tax. Under this scheme, if such individuals register and discharge their tax liability before a specified date, no penal provisions will be invoked against them. In this case, the appellant deposited the entire amount of Service Tax and interest by the deadline, aligning with the scheme's requirements.

4. Considering the appellant's compliance with the scheme and the precedent set by a previous Tribunal decision, the impugned order is set aside, and the appeal is allowed. The Tribunal's decision is based on the appellant's adherence to the scheme's conditions and the specific circumstances of the case, leading to the favorable outcome for the appellant.

This detailed analysis of the judgment covers the various issues addressed, including the legal provisions, penalties imposed, compliance with the scheme, and the Tribunal's decision based on precedent and specific case circumstances.