2017 (11) TMI 245 - AT - Service Tax

Non-payment/short-payment of service tax - security services to telecom towers - imposition of penalty - Held that - reliance placed in the case of Ashok Hotel Versus Commissioner of Central Excise 2012 (6) TMI 162 - CESTAT, NEW DELHI , where it was held that sufficient cause has been shown for invoking the provisions of Section 80 of Finance Act, 1994 - penalty cannot be imposed when there is a reasonable cause for short payment of tax, relying in the decision in the case of CCE Vs. Sai Sabareesh Agencies 2017 (9) TMI 1262-CESTAT Bangalore - appeal dismissed - decided against Revenue.

Summary

Issues:
Revenue's appeal against Commissioner's order setting aside the demand of interest and penalty under Finance Act, 1994.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner (A), setting aside the demand of interest and penalty imposed on the appellant. The appellant held a registration certificate for payment of service tax on 'Security Agency Services' but failed to discharge the service tax liability on services provided to telecom towers in Karnataka, Mumbai, and Chennai. The total short payment of service tax for the period from 2008-09 to 2011-12 was submitted and paid by the appellant along with applicable interest. The impugned order demanded and confirmed the service tax, interest, and imposed penalties under Rule 77 and 78 of the Finance Act, 1994.

The assesse filed an appeal before the Commissioner against the order-in-original, which was allowed, modifying the original order. The Revenue, aggrieved by the decision, filed the present appeal. The arguments presented by both parties were considered, where the Learned AR for the appellant contended that dropping the demand of interest and penalty was not sustainable under the law. On the other hand, the Learned Counsel for the respondent defended the impugned order, citing various decisions and provisions of the Finance Act, 1994.

The Commissioner's order was based on reasoned consideration of all facts and previous Tribunal decisions, extending the benefit of section 80 of the Finance Act, 1994. The Counsel for the respondent argued that penalty cannot be imposed when the service tax and interest are paid before the issue of show cause notice, citing relevant case law. Further, it was argued that penalty cannot be imposed in cases of reasonable cause for delay in payment or clerical mistakes, supported by additional case law references.

After considering the submissions and judgments relied upon by the assesse, the Judicial Member concluded that there was no infirmity in the impugned order. The decision was upheld based on the reasons and decisions cited, dismissing the appeal of the Revenue. The operative portion of the order was pronounced in open court on 26/10/2017.