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2009 (9) TMI 33 - AT - Service TaxPenalty for late payment of service tax Held that once an assessee has paid service tax as on 31.3.2005 for the earlier period they can not claim that they ware not aware of the liability for the subsequent months penalty set aside by the commissioner (Appeals) is incorrect therefore penalty restored for the period April 2005 June 2005 and August 2005.
Issues:
Appeal against setting aside penalty under section 76 of the Finance Act for delayed payment of service tax. Analysis: The case involved an appeal by the department against the order of the Commissioner (Appeals) regarding the penalty imposed for delayed payment of service tax. The respondents, providers of consulting engineering services, had defaulted in paying service tax for several months. The tax for certain months had been paid after the due dates. The original authority imposed a penalty of Rs.35,116, which was set aside by the Commissioner (Appeals) invoking the provisions under section 80, stating that the respondents had shown reasonable cause for the delay in tax payment. The department argued that even if the respondents claimed ignorance of the law, they should have been aware of their tax liability for subsequent months after paying for the earlier period. The department sought the restoration of the original authority's order. The Tribunal considered the submissions and written arguments. It acknowledged that ignorance of the legal position might be justified for the delayed payment of tax for the earlier period. However, it found it unreasonable that the respondents were unaware of their tax liability for the subsequent months after paying for the earlier period. Therefore, the Tribunal set aside the Commissioner's order in relation to the penalty for the months of April, June, and August 2005, reinstating the penalty under Section 76 for the delayed payments in those months. However, the penalty for the earlier period was upheld. Consequently, the appeal was partially allowed, and the penalty under Section 76 for the delayed payments in April, June, and August 2005 was restored, while the penalty for the earlier period remained upheld.
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