2019 (8) TMI 1303 - AT - Service Tax

Penalty - Failure to make payment of service tax - security services - period January, 2012 to June, 2012 - Appellant submitted that the Appellants have already paid the amount of service tax alongwith interest and penalty - HELD THAT - The receipts of the Appellants were well within the exempted limits as per the notification aforesaid and therefore in view of the peculiar facts of the case, a lenient view can be taken - Since the learned Counsel has confined her arguments only limited to imposition of penalty under Section 70 ibid r/w Rule 7C ibid, therefore I am not going into other aspects of the matter. Penalty set aside - demand with interest upheld - appeal allowed in part.

Summary

Issues:
- Appellant providing security services
- Failure to pay service tax
- Non-receipt of show cause notice
- Imposition of penalty under Section 70 of the Finance Act
- Exemption under Notification No. 8/2008

Analysis:
1. The Appellant, a proprietary concern providing security services, challenged an order passed by the Commissioner of Central Tax for not paying service tax on services provided to a specific entity during a certain period. The Appellant claimed they did not receive the show cause notice and were unaware of the proceedings, leading to non-representation before the lower authority. It was argued that the orders passed by the authorities covered a period beyond that mentioned in the show cause notice.

2. The Tribunal considered the arguments presented by both parties. The Appellant had already paid the service tax, interest, and penalty, focusing the discussion on the penalty imposed under Section 70 of the Finance Act for not filing ST-3 Returns for a specified period. The Appellant contended that they were exempt from filing returns during the relevant period as their turnover was below the exemption limit of ?10 lakhs, supported by financial statements. The Tribunal noted that the Appellant's receipts were within the exempted limits as per the relevant notification, suggesting a lenient view due to the circumstances. The Tribunal, therefore, set aside the penalty of ?2 lakhs for not filing the ST-3 Returns, upholding the service tax demand and interest while disposing of the Appeal accordingly.

3. The Tribunal's decision, delivered by Mr. Ajay Sharma, Member (Judicial), on 28.08.2019, highlighted the importance of adherence to procedural requirements, exemption provisions, and the principles of natural justice in tax matters. The case underscores the significance of timely communication and compliance with tax regulations to avoid penalties, while also recognizing genuine circumstances where exemptions apply based on financial thresholds specified in relevant notifications.