2008 (6) TMI 112 - AT - Service Tax

Commissioner (Appeals) has set aside the order-in-original imposing the penalties on the respondents on the ground that the appellants has discharged the entire service tax liability before 30/10/2004 - Commissioner (Appeals) has correctly followed the law as has been laid down by the various decision of the Tribunal - any reason for interference in the order of the Commissioner (Appeals) for such miniscule amount of Rs.2,651/- which was paid subsequently

Summary

Issues:
- Appeal against order-in-appeal setting aside penalties imposed on respondents for service tax liability payment timeline.
- Interpretation of the "Extra ordinary Taxpayer Friendly Scheme" and its applicability to penalty imposition.
- Compliance with service tax payment regulations and penalties under the Finance Act, 1994.

Analysis:
1. The appeal was filed by the revenue challenging the order-in-appeal that set aside penalties imposed on the respondents for their service tax liability payment timeline. The revenue contended that even though the respondents had paid a significant amount before a specified date, a small sum was paid later, after the amnesty scheme had ended. The revenue sought the reversal of the order-in-appeal.

2. The key issue revolved around the interpretation of the "Extra ordinary Taxpayer Friendly Scheme" and its impact on penalty imposition. The Ld. Commissioner (Appeals) referenced precedents, including the case of CCE, Bhopal Vs Bharat Security Service & Workers Cont., to support the stance that a service tax provider who registered and paid the tax before a certain date should not be penalized under the scheme. The Commissioner applied this principle, citing the case of SS Shah Vs CCE, Nasik, to grant immunity from penalties to the appellant.

3. The Ld. Commissioner (Appeals) correctly applied the legal principles established by various Tribunal decisions. It was noted that the respondents had paid a substantial portion of their tax liability before the specified date, with only a small amount paid after the scheme had ended. Considering the factual matrix and the compliance history, the Commissioner found no justification for penalizing the respondents for the minor outstanding amount paid after the scheme's expiration.

4. Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the revenue's appeal. The Tribunal concurred with the findings that the respondents had substantially complied with their tax obligations before the scheme deadline, and the penalty imposition for the remaining minimal amount was unwarranted. The judgment emphasized adherence to legal precedents and the principles of fairness in tax enforcement.

This comprehensive analysis highlights the legal nuances, precedents, and factual considerations that informed the Tribunal's decision in this case.