2007 (12) TMI 147 - AT - Service Tax

In view of decision of other tribunal decisions, penalty is held to be not imposable u/s 76 of the Finance Act, 1994, for the reason that the Service Tax was paid prior to the issuance of SCN reliance placed by revenue on the amendment to Sec. 76 w.e.f. 14-5-03 to hold that those decision of Tribunal, would not apply as it covered the period post amendment, while the period in the present case is October, 2002, which is prior to the amendment in Sec. 76, does not make any difference

Summary

Issues:
1. Setting aside of penalty imposed under Section 76 of the Finance Act, 1994 due to early payment of Service Tax before show cause notice.
2. Interpretation of Section 76 in light of amendments and precedent judgments.

Analysis:
1. The judgment deals with the setting aside of a penalty imposed under Section 76 of the Finance Act, 1994, due to the early payment of Service Tax before the issuance of a show cause notice. The lower appellate authority had set aside the penalty on the grounds that the entire Service Tax amount, along with interest, was deposited before the show cause notice was issued. The Revenue appealed against this decision.

2. The Vice-President, in absence of representation from the respondent, considered the case law precedent set by the Tribunal and the amendment to Section 76. Referring to the case of Sieger Spintech Equipments Pvt. Ltd. v. Commissioner of Central Excise, Coimbatore, it was held that penalty under Section 76 is not imposable if the Service Tax was paid prior to the issuance of the show cause notice. This interpretation was consistent with earlier decisions in cases such as Commissioner v. Pioneer Plastic Products and Commissioner v. Top Detective and Security Services Pvt. Ltd.

3. The learned DR argued that the amendment to Section 76 from 14-5-2003 should be considered, making the Tribunal's decision in Sieger Spintech Equipments Pvt. Ltd. case inapplicable as it pertained to a post-amendment period. However, the Vice-President emphasized that the amendment did not alter the applicability of the Tribunal's decisions to cases before the amendment date. Therefore, the order of the Commissioner (Appeals) setting aside the penalty was upheld, and the appeal by the Revenue was rejected.

4. In conclusion, the judgment reaffirms the principle that if the Service Tax is paid before the issuance of a show cause notice, penalty under Section 76 of the Finance Act, 1994, is not imposable. The decision was based on established case law and the interpretation of the relevant legal provisions, maintaining consistency with previous Tribunal rulings. The appeal was dismissed, and the order of the lower appellate authority was upheld.