2018 (5) TMI 1214 - AT - Service Tax

Penalty u/s 78 - invocation of section 80 - case of assessee is that during the relevant time there was a confusion regarding the taxability on Renting of Immovable Property Service - case of Revenue is that Section 80 has been omitted w.e.f. 14/05/2015 without any supporting clause to apply Section 80 and hence cannot be invocable in the present case - Held that - there is no infirmity in the impugned order whereby the Commissioner (Appeals) has dropped the penalty under Section 78 by invoking Section 80 which was available during the relevant time - penalty set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against dropping penalty under Section 78 by invoking Section 80.
- Validity of invoking Section 80 post its omission w.e.f. 14/05/2015.
- Confusion regarding taxability on Renting of Immovable Property Service.
- Justifiability of dropping penalty by Commissioner (Appeals).

Analysis:

The appeal was filed by the Revenue against the dropping of penalty under Section 78 by the Commissioner (Appeals) by invoking Section 80. The case involved the non-payment of service tax by the assessee for the period from 4/2010 to 3/2012, despite having Service Tax Registration. The original authority confirmed a demand of &8377; 11,95,493/- along with interest and imposed penalties under Sections 77(2) and 78 of the Finance Act. The Commissioner (Appeals) upheld the service tax demand but dropped the penalty under Section 78 by invoking erstwhile provision of Section 80. The Revenue contended that the omission of Section 80 w.e.f. 14/05/2015 rendered the invocation of Section 80 invalid. However, the counsel for the assessee argued that the Commissioner (Appeals) was justified in invoking Section 80 due to confusion regarding the taxability of Renting of Immovable Property Service during the relevant time.

During the hearing, the Revenue argued that dropping the penalty by invoking Section 80 was incorrect and unsustainable post its omission. On the contrary, the counsel for the assessee supported the Commissioner (Appeals)' decision by citing relevant case laws. The Tribunal, after considering the arguments and material on record, found no infirmity in the impugned order. It noted that the Commissioner (Appeals) had valid reasons for invoking Section 80, primarily due to the confusion surrounding the taxability of Renting of Immovable Property Service during the relevant period. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal of the Revenue.

In conclusion, the Tribunal affirmed the dropping of penalty under Section 78 by invoking Section 80, emphasizing the validity of the decision based on the confusion regarding the taxability of the service during the relevant period. The case serves as a reminder of the importance of considering the legal provisions applicable at the relevant time while adjudicating tax matters.