2018 (9) TMI 1363 - AT - Service Tax

Penalty u/s 76 - Bonafide intent - Abatement in terms of N/N. 32/2004 dated 03.12.2004 - GTA Services - Reverse Charge Mechanism - Held that - The demand on service tax is liable to be paid by them on reverse charge basis, as recipient of GTA Services. Inasmuch as, the appellant was not service provider, there could be a bonafide intention in his mind, as regards his liability to pay service tax - also, the disputed issue was subject matter of litigation before various authorities and was ultimately settled - penalty not justified and is set aside - appeal allowed.

Summary

Issues:
1. Request for adjournment
2. Confirmation of service tax demand
3. Challenge to penalty under Section 76 of the Finance Act, 1994

Analysis:
1. The Tribunal rejected the request for adjournment and proceeded to decide the appeal due to a short issue involved.
2. The Original Adjudicating Authority confirmed a service tax demand against the appellant for not availing abatement available in terms of Notification No.32/2004 while discharging service tax liability on reverse charge basis for GTA Services. The demand for another amount was confirmed as unpaid. The Commissioner (Appeals) set aside one demand but confirmed the other along with interest and penalty.
3. The only challenge in the appeal was the penalty imposed under Section 76 of the Finance Act, 1994. The appellant argued lack of clarity in the law during the relevant period and their unawareness of the liability. They deposited the amount even before the show cause notice, seeking to set aside the penalty. The Tribunal agreed with the appellant, considering their bonafide intention and the settled nature of the disputed issue. The penalty was set aside, and the appeal was allowed in that regard.