2009 (4) TMI 179 - AT - Service Tax

Revenue filed this appeal against the order of the Commissioner (Appeals), whereby penalty imposed under Section 76 and 77 upon the respondent was set aside. - Section 80 of the Finance Act provides that no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was a reasonable cause for that said failure - I find that the Commissioner (Appeals) had given the detailed finding for setting aside penalty, which was not disputed by the Revenue in the Grounds of Appeal Therefore, Appeal is rejected

Summary

The Appellate Tribunal CESTAT, DELHI, presided over by Shri P.K. Das, Member (J), heard an appeal filed by the Revenue against the order of the Commissioner (Appeals) that set aside penalties imposed under Section 76 and 77 upon the respondent. The Commissioner (Appeals) found that the respondent, a State Government organization, had already paid the service tax along with interest, and that there was no corroborative evidence to establish an intention to evade payment. The Commissioner held that the penalties imposed were not maintainable due to the absence of mens rea. The Revenue argued that Section 76 of the Finance Act does not require mens rea for penalty imposition and that ignorance of the law is not an excuse. However, the Tribunal noted that Section 80 of the Finance Act states that no penalty shall be imposed if the assessee proves a reasonable cause for the failure. Since the Commissioner's detailed findings were not disputed by the Revenue, the Tribunal rejected the appeal, upholding the Commissioner's decision to set aside the penalties. The order was pronounced on 15-4-2009.