2009 (4) TMI 115 - AT - Service Tax

Waiver of Penalty u/s 80 Assessee immediately deposited the tax partly after pointed out by the department - The Original Authority confirmed the demand of tax and imposed penalty of equal amount under sections 75, 76 and 77 of the Finance Act - The Commissioner (Appeals) set aside the penalties Order of Commissioner (Appeals) confirmed.

Summary

Issues:
1. Whether the services provided by the respondent are covered under "Business Auxiliary Service" for levying Service Tax.
2. Whether the non-payment of tax by the respondent constitutes suppression of facts with intent to evade payment of tax.
3. Whether the penalties imposed on the respondent are sustainable.

Analysis:
1. The respondent was engaged in providing Direct Sales Associates (DSA) services, categorized under "Business Auxiliary Service." Central Excise Officers found the services to be leviable for Service Tax. The respondent partially deposited the tax, and the Original Authority confirmed the tax demand, imposing penalties under sections 75, 76, and 77 of the Finance Act. The Commissioner (Appeals) later set aside the penalties.

2. The Revenue argued that the respondent's payment of tax post-detection indicated suppression of facts to evade tax payment. However, the Commissioner (Appeals) found that the respondent had received taxable amounts from clients, recorded them in their books, and did not suppress any information to evade service tax. The Commissioner concluded that there was no fraud, collusion, wilful mis-statement, or suppression of facts by the respondent, as the non-payment occurred due to a genuine belief that the services were not covered under "Business Auxiliary Service."

3. The Revenue contended that the Central Excise Officers noted non-payment of tax, suggesting the respondent's intent to evade payment. However, upon review, there was no evidence of suppression or contravention by the respondent. The Tribunal agreed with the Commissioner's findings, stating that there was no material for suppression of facts or contravention to evade tax payment. Consequently, the Tribunal rejected the Revenue's appeal, upholding the Commissioner (Appeals)'s decision to set aside the penalties imposed on the respondent.

This detailed analysis of the judgment highlights the issues, arguments presented, and the final decision reached by the Appellate Tribunal CESTAT, New Delhi, regarding the levying of Service Tax on the respondent's services and the sustainability of penalties imposed.