2018 (5) TMI 1565 - AT - Service Tax

Liability of Interest and penalty - pursuant to the retrospective validation of levy of service tax on renting of immovable property by enactment of Section 77 of the Finance Act, 2010 - Held that - the issue of liability of interest and penalty before 8 5.2010, on the service tax paid pursuant to the validating provision Sec. 77 of Finance Act, 2010 validating retrospectively levy of service tax on Renting of Immovable Property service has been considered by this Tribunal in D. S. Narayana & Company Pvt, Ltd s case 2017 (4) TMI 897 - CESTAT HYDERABAD , where it was held that The appellant is not liable to pay interest prior to 08.05.2010 and also the penalty. The appellant has paid the interest on the entire demand after 08.05.2010 till payment. Imposition of penalty, on the appellant under 76, and 78 of Finance Act, 1994 and interest liability prior to 08.5.2010 is hereby set-aside - appeal disposed off.

Summary

Issues: Liability of interest and penalty under Sections 76, 77, and 78 of the Finance Act, 1994 on service tax paid retrospectively.

In this case, the appellant filed an appeal against an order-in-appeal passed by the Commissioner (Appeals), Central Excise, Ahmedabad, regarding the liability of interest and penalty under Sections 76, 77, and 78 of the Finance Act, 1994. The main question raised was whether the appellant is required to discharge interest and penalty when they had paid the entire service tax liability of &8377; 14,05,846/- for the period June 2007 to March 2009 on 07.07.2010, following the retrospective validation of levy of service tax on renting of immovable property by enactment of Section 77 of the Finance Act, 2010.

The appellant argued that due to the retrospective effect of the Finance Act, they had paid an amount exceeding the service tax liability, relying on a judgment of the Tribunal in a similar case. The Revenue, represented by the Advocate, supported the findings of the Commissioner (Appeals). The Tribunal referred to a previous case and noted that no demand for service tax on renting of immovable property could have been made before 8-5-2010 due to the absence of the relevant amendment. Consequently, the Tribunal held that the appellant was not liable to pay interest before 8-5-2010 and penalty under Section 76. The Tribunal upheld the late fee imposed under Section 70 of the Finance Act, 1994, but set aside the demand for interest and penalty post 8-5-2010. Following the precedent, the imposition of penalty under Sections 76 and 78 of the Finance Act, 1994, and interest liability before 08.5.2010 was overturned, and the appeal was disposed of accordingly.