2008 (12) TMI 83 - AT - Service Tax

Penalties have been imposed on the appellant for non-payment of service tax of commercial training/coaching classes conducted by him for 11th and 12th students - appellant is an individual engaged in teaching appellant is only a teacher and is engaged in coaching and does not have a big organization and paid the tax and the interest once he was informed of the liability - reasonable cause has been shown for the purpose of Section 80 to waive the penalty imposed

Summary

Issues: Challenge against imposition of penalties under sections 76, 77, and 78 of Finance Act, 1994 for non-payment of service tax on commercial training/coaching classes.

Analysis:
The appellant contested the penalties imposed for not paying service tax on coaching classes for 11th and 12th students. The appellant, an individual, argued that he believed coaching services were exempt and only paid the tax upon realizing his liability, even before receiving a show cause notice. The appellant, a technical person primarily focused on teaching, lacked familiarity with tax laws. The advocate sought leniency due to these circumstances. The Department, citing a previous Tribunal decision, supported the penalty imposition. Additionally, the appellant filed the appeal late as he was unaware of the order-in-appeal until approached for arrears recovery.

Upon review, the Tribunal acknowledged the appellant's role as a teacher providing coaching without a formal institute. Considering the appellant's prompt tax payment upon realizing the liability, the Tribunal found a reasonable cause to take a lenient view on penalties under Section 80. Consequently, the appeal was allowed, granting relief to the appellant.