2007 (5) TMI 241 - AT - Service Tax

Penalty for failure to pay service tax held that - It is undisputed that the appellants had discharged the entire amount of service tax and interest. The issue is now squarely covered by the decisions, that this issue is covered by the Amnesty Scheme introduced by Government of India - Extraordinary Taxpayer Scheme will be applicable even to the service tax registration holders, if they had discharged the service tax amount before the cut off date as indicated in the Amnesty Scheme. penalty set aside.

Summary

Issues:
- Failure to pay service tax for the period April, 2002 to March, 2008
- Imposition of penalty under sections 76 and 77
- Enhancement of penalty under section 76 by the Commissioner
- Applicability of the Amnesty Scheme introduced by the Government of India

Analysis:
1. The case involved the appellant's failure to pay service tax for a specific period, leading to the issuance of a show-cause notice for demanding the tax and imposing penalties under sections 76 and 77 of the Finance Act, 1994. The adjudicating authority confirmed the demand, appropriated the amount of service tax paid by the appellant, and imposed penalties. Subsequently, the Commissioner issued a show-cause notice to enhance the penalty under section 76, which the appellant resisted, resulting in an appeal against the decision.

2. The appellant's consultant argued that the entire service tax amount and interest were paid on a specific date, and the Amnesty Scheme introduced by the Government of India should be applicable in this case. On the other hand, the JDR reiterated the findings of the Commissioner regarding the penalty enhancement.

3. Upon considering the submissions from both sides and examining the records, the Tribunal noted that the appellants had indeed paid the entire service tax and interest. The crucial issue was whether the Amnesty Scheme applied to the case. Referring to a previous decision in the case of CCE v. Bharat Security Services & Workers' Cont., the Tribunal established that the Amnesty Scheme extended to service tax registration holders who had paid the tax before the scheme's cut-off date.

4. Consequently, based on the precedent set in the Bharat Security Services case, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant. The decision highlighted the applicability of the Amnesty Scheme to the appellant's situation, emphasizing the importance of meeting the scheme's requirements for eligibility.