2018 (2) TMI 1123 - AT - Service Tax

Monetary limit involved in appeal - Non-discharge of tax liability - Held that - the disputed tax liability is less than 10 lakhs and as per the litigation policy of the Government of India, the appeal stands dismissed.

Summary

Issues involved:
1. Service tax liability for various services rendered.
2. Confirmation of demand and penalties imposed.
3. Applicability of Section 80 of the Finance Act, 1994.
4. Dismissal of appeal based on disputed tax liability amount.

Issue 1: Service tax liability for various services rendered
The judgment pertains to a case where the respondent was issued a show cause notice for a service tax liability of approximately ?20.52 lakhs for services like BAS, Management, Maintenance and Repair Service, Goods Transport Agency Service, Manpower Recruitment and Supply Service, etc., rendered during the period from 01/04/2004 to 30/09/2007.

Issue 2: Confirmation of demand and penalties imposed
Upon review of the records, it was found that the confirmed demand of ?20.52 lakhs was partially paid by the respondent, with an amount of ?15.66 lakhs being appropriated. The first appellate authority confirmed a demand of approximately ?5.41 lakhs and penalties imposed by the adjudicating authority. However, the appellate authority dropped the demand of ?5.41 lakhs, citing that the tax liability was on bills for reimbursement of expenses incurred by the respondent, referencing a decision of the Tribunal in a similar case. The penalties were also dropped invoking Section 80 of the Finance Act, 1994.

Issue 3: Applicability of Section 80 of the Finance Act, 1994
The first appellate authority invoked Section 80 of the Finance Act, 1994, to drop the penalties imposed on the respondent. Section 80 provides for waiver of penalties if the taxpayer proves that there was reasonable cause for the failure to discharge the tax liability.

Issue 4: Dismissal of appeal based on disputed tax liability amount
Given that the disputed tax liability was less than ?10 lakhs, in accordance with the litigation policy of the Government of India, the appeal was dismissed. This decision was based on the threshold amount set by the government for pursuing appeals in tax matters.

This judgment highlights the assessment of service tax liability, confirmation of demand, penalties imposed, and the application of Section 80 of the Finance Act, 1994, in a case where the disputed tax liability fell below a certain threshold resulting in the dismissal of the appeal. The decision provides insights into the legal framework governing tax disputes and the considerations taken into account when determining the outcome of such cases.