2007 (1) TMI 177 - AT - Service Tax

Intention to evade duty - no allegation of suppression made in the SCN - appellants submission that, having regard to the smallness of the amount involved the appellants would pay up service tax of Rs. 5,690/-, but there was no warrant for imposing penalties, is acceptable - since the service tax of Rs. 5,690/- is upheld and no intention to evade duty is at all alleged in SCN, the appellant has made out a reasonable ground under Section 80, for waving the penalties

Summary

Issues:
1. Interpretation of Section 71A of Chapter V of the Finance Act, 1994 for demanding service tax.
2. Confirmation of service tax liability, interest, and penalties under Sections 68, 75, 76, and 78 of the Act.
3. Imposition of penalties under Sections 76 and 78 without specific allegations of suppression.
4. Application of Section 80 for waving penalties based on the concession made by the appellant.

Analysis:

1. The appeal challenged the order of the Commissioner (Appeals) regarding the demand for service tax based on Section 71A of the Finance Act, 1994. The appellant relied on the decisions of the Hon'ble Supreme Court and the Tribunal to argue that the relevant date for demanding service tax was six months from a specific date. The Appellate Tribunal considered this argument in light of the provisions of the Act and relevant case laws.

2. The Appellate Commissioner confirmed the service tax liability, interest under Sections 68 and 75, and penalties under Sections 76 and 78. The appellant agreed to pay the service tax amount but contested the imposition of penalties. The Tribunal examined the applicability of penalties in the absence of specific allegations of suppression in the show cause notice.

3. The appellant cited a Tribunal decision related to the Central Excise Act, 1944, to support the argument that penalties should not be imposed without specific allegations of commission or omission. The Department's representative argued for the imposition of penalties based on the allegation of suppression and non-filing of returns as per the amended Section 71A.

4. The Tribunal considered the absence of specific allegations of suppression in the show cause notice and the appellant's willingness to pay the service tax amount. As there was no intention to evade tax and the service tax liability was confirmed based on the concession, the Tribunal partially allowed the appeal by setting aside the penalties imposed under Sections 76 and 78. The decision was made under Section 80 of the Act, considering the circumstances and grounds presented by the appellant.

This detailed analysis of the judgment addresses the interpretation of relevant legal provisions, confirmation of liabilities, imposition of penalties, and the application of statutory provisions for modifying the impugned order.