2017 (6) TMI 537 - AT - Service Tax

Penalties u/s 76 and 78 of FA - demand on the ground of non-payment of tax - invocation of section 80 - Held that - the Ld. Commissioner (Appeals) has considered the contention of the respondent that some robbery took placed in their house in June 2005 and some money was also robbed from the respondent - the Ld. Commissioner (Appeals) is fare and reasonable by giving the benefit of Section 80 of the Act considering the reason caused due to robbery for non-payment of Service Tax - appeal dismissed - decided against Revenue.

Summary

Issues: Revenue's appeal against dropping penalties under Section 76 and 78 of the Finance Act, 1994

Analysis:
The case involved an appeal by the Revenue against an order where penalties under Section 76 and 78 of the Finance Act, 1994 were dropped by the Ld. Commissioner (A) based on the benefit of Section 80 of the Finance Act, 1994 granted to the respondent. The respondent, registered under Insurance Auxiliary Services, had not paid Service Tax for the period from 01.10.2003 to 31.03.2007. A show cause notice was issued by the Revenue demanding Service Tax, interest, and imposing penalties. The matter was adjudicated, confirming the demand and penalties. The Ld. Commissioner (A) then dropped the penalties under Sections 76 and 78, citing Section 80 of the Finance Act, 1994. The Revenue contended that the respondent failed to show a reasonable cause, and the Ld. Commissioner (A) erred in granting the benefit of Section 80.

The Ld. Commissioner (A) considered the respondent's claim that a robbery occurred at their house in June 2005, resulting in money being stolen. Taking this into account, the Ld. Commissioner (A) granted the benefit of Section 80 of the Finance Act, 1994. The appellate tribunal found the decision to grant the benefit of Section 80 reasonable and fair under the circumstances, considering the impact of the robbery on the non-payment of Service Tax. Consequently, the tribunal upheld the impugned order, dismissing the Revenue's appeal against the dropped penalties under Sections 76 and 78 of the Finance Act, 1994.

In conclusion, the tribunal's decision was based on the reasoning that the Ld. Commissioner (A) correctly applied the provisions of the Finance Act, 1994 in granting the benefit of Section 80 due to the specific circumstances involving the robbery at the respondent's premises. The tribunal found no fault in the Ld. Commissioner (A)'s decision and upheld the dropping of penalties under Sections 76 and 78, ultimately dismissing the Revenue's appeal.