2007 (4) TMI 191 - AT - Service Tax

Non-payment of Service Tax liability - appellant took registration and paid the service tax along with interest prior to the introduction of Extra ordinary Taxpayer Friendly Scheme which was operative upto 30/10/04 service tax provider who registered himself and paid service tax along with interest prior to 30/10/2004 is not liable to any penalty under the said scheme hence Commissioner rightly set aside penalty on ground that assessee deserves impunity under impugned scheme

Summary

Issues:
Non-payment of Service Tax liability by the respondent for C&F agent services, applicability of penalty, interpretation of Extraordinary Taxpayer Friendly Scheme.

Analysis:
The appeal was filed against the order-in-appeal that set aside the penalty imposed on the respondent for non-payment of Service Tax liability for C&F agent services. Despite the respondent's absence, the issue was considered due to its narrow compass and alignment with Tribunal decisions. The respondent eventually discharged the service tax liability after being notified by the authorities. The Ld. Commissioner (Appeals) based the decision on the case law of Bharat Security Services & Workers Cont. (2005) and the principles laid down by the Hon'ble Supreme Court. The Commissioner concluded that the immunity under the Extraordinary Taxpayer Friendly Scheme should be extended to the appellant, as they had registered and paid the service tax along with interest before the scheme's expiry on 30/10/2004. The Commissioner's decision was supported by the Tribunal's application of similar principles in various cases, leading to the dismissal of the revenue's appeal.

In the detailed analysis, it was noted that the Ld. Commissioner (Appeals) correctly applied the case law of Bharat Security Services & Workers Cont. (2005) to the current case. The Commissioner's decision was deemed legally sound and in favor of the respondent, as the issue was squarely covered by previous judgments. The Ld. Commissioner's decision to set aside the penalty was upheld, indicating that no interference was necessary. The appeal filed by the revenue was subsequently dismissed, affirming the legality of the Commissioner's ruling.

This judgment highlights the importance of timely compliance with tax liabilities and the significance of legal precedents in determining penalty applicability under specific schemes. The case serves as a reminder of the necessity for taxpayers to adhere to registration and payment requirements within the stipulated timelines to benefit from potential immunities provided by relevant schemes.