2018 (9) TMI 1062 - AT - Service Tax

Penalty - Invocation of section 80 - boat service - Convention Services - demands is not being pursued - Held that - Confusion in the mind of the appellant is caused due to amendment - Nevertheless, the assessee obtained registration, which facts are not disputed by the Revenue. Hence, there is reasonable cause for the failure to discharge their tax liability and in consequence, the provisions of Section 80 ibid. are very much invokable - penalties set aside - appeal allowed in part.

Summary

Issues: Appeal against levy of Service Tax, exclusion of taxable value, principle of 'cum tax value' applicability, interest levy, penalty under various sections, waiver of penalties, confusion due to amendment in Section 65(25A).

Analysis:
1. Levy of Service Tax: The appellant sought relief from the impugned order related to the levy of Service Tax for the period from May 2011 to March 2012 in respect of Hire charges of Boats used for entertainment purposes. The appellant requested the exclusion of the value of Daily receipts received from tourists from the taxable value. The Tribunal did not delve into the merits of this issue as the appellant was not pursuing the appeal on its merits.

2. Principle of 'Cum Tax Value': The appellant also requested the application of the principle of 'cum tax value' and the revision of the quantum of Service Tax. However, since the appeal was not pressed on merits, this aspect was not further discussed by the Tribunal.

3. Interest Levy and Penalties: The appellant sought to set aside the levy of interest under Section 75 of the Act and penalties imposed under various sections. The Tribunal acknowledged the confusion caused by an amendment in Section 65(25A) and the reasonable cause for the failure to discharge tax liability. Consequently, the penalties were set aside based on the provisions of Section 80 of the Finance Act.

4. Waiver of Penalties: The appellant requested the waiver of penalties under Section 80 of the Finance Act, citing reasonable cause and being a Charitable Institution. The Tribunal agreed that there was a reasonable cause for the confusion and set aside the penalties accordingly.

5. Conclusion: The Tribunal partially allowed the appeal, setting aside the penalties upheld by the lower appellate authority due to the confusion caused by the amendment and the reasonable cause for the failure to discharge tax liability. The operative part of the order was pronounced in open court, concluding the matter in favor of the appellant on the issue of penalties.