2016 (11) TMI 935 - AT - Service Tax

Revision - Section 84 of the Finance Act, 1994 - SSP - Held that - I find that once the Commissioner has passed the revision order, the order of the adjudicating authority does not exist. Now as per the submission of the Ld. Counsel, I find that the appellant is a small scale service provider. They have paid the service tax along with the interest before the issuance of show cause notice and also filed the necessary returns of the transaction of service provided by the appellant and the value thereof was retrieved from their book of accounts. With the above facts, I am of the view that the appellant have been able to show the reasonable cause for non-payment of service tax in time. Therefore, the appellant is entitled for the waiver of penalty imposed under Section 76 invoking Section 80 of the Finance Act, 1994, therefore the penalty is waived. The impugned order is set aside the appeal is allowed.

Summary

Issues:
Appeal against Order-in-Revision enhancing penalty under Section 84 of the Finance Act, 1994. Applicability of waiver of penalty under Section 80 based on reasonable cause for non-payment of service tax in time.

Analysis:
The appeal challenged an Order-in-Revision enhancing a penalty under Section 84 of the Finance Act, 1994. The appellant, a small-scale service provider, argued that the non-payment of service tax in time was due to a lack of qualified staff to manage tax compliance. The appellant paid the tax, interest, and penalty without contest after the discrepancy was noted. The appellant contended that there was no intention to evade tax and sought a waiver of the penalty under Section 80. The appellant supported their argument with references to relevant judgments. The Revenue, represented by the Examiner Officer, argued that the penalty was imposed due to a lack of satisfactory cause for late payment of tax. Citing precedents, the Revenue contended that the adjudicating authority had no discretion to reduce the penalty. The Tribunal noted that once the Commissioner passed the revision order, the adjudicating authority's order ceased to exist. Considering the appellant's status as a small-scale service provider, the Tribunal found that the appellant had paid the tax and interest before the show cause notice and had recorded the transaction in their books. Consequently, the Tribunal held that the appellant had shown a reasonable cause for the delay in tax payment and was entitled to a waiver of the penalty under Section 80. The impugned order was set aside, and the appeal was allowed.

This judgment addressed the issue of waiver of penalty under Section 80 based on the reasonable cause for non-payment of service tax in time. The Tribunal emphasized that the appellant, a small-scale service provider, had paid the tax and interest before any notice was issued and had maintained proper records of the transactions. By demonstrating a reasonable cause for the delay in payment, the appellant successfully argued for the waiver of the penalty under Section 80. The Tribunal's decision was influenced by the appellant's compliance efforts and lack of intent to evade tax, as evidenced by their actions and documentation. The judgment highlighted the importance of maintaining accurate records and promptly addressing tax discrepancies to support claims for penalty waivers under relevant provisions of the Finance Act, 1994.