2008 (12) TMI 106 - AT - Service Tax

Security service assessee submit that demand confirmed is for period beyond 5 years which is not permissible and amount of service tax collected should be treated as Cum-tax value further, assessee submit that penalties should have been set aside in toto whereas Commissioner (A) has only reduced the penalties appellant s all prayers are accepted - Original Authority is directed to re-determine the service tax liability

Summary

Issues:
Demand of service tax, penalties under various sections, reduction of demand, setting aside penalties, treatment of service tax collected, waiver of penalty on deceased proprietor.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved the appeal of the wife of a deceased proprietor of a security service firm regarding the demand of service tax, penalties, and other related issues. The Original Authority had confirmed a service tax demand of Rs. 1,43,785 along with interest and imposed penalties under various sections. The Commissioner (Appeals) had reduced the demand and penalties. The Chartered Accountant representing the appellant did not dispute the service tax liability but sought a reduction in the demand and setting aside of penalties.

Regarding the demand beyond 5 years for some parties, the Chartered Accountant argued that it was impermissible and sought similar treatment as parties where the demand was reduced by the Commissioner (Appeals). Additionally, he requested that the service tax collected should be treated as Cum-tax value, a request that had not been allowed earlier. The next prayer was for the waiver of penalties on the deceased proprietor, emphasizing that he had passed away before the adjudication order was issued. The Commissioner (Appeals) had only reduced the penalties, but the Chartered Accountant sought a complete waiver, which was granted by the Tribunal.

The Tribunal disposed of the appeal by setting aside the penalties and directing the Original Authority to re-determine the service tax liability based on their directions. The judgment highlighted the importance of considering requests for reduction of demand, treatment of collected service tax, and waiver of penalties in cases involving deceased individuals. The decision provided clarity on these issues and emphasized the need for fair treatment in such circumstances.