2007 (7) TMI 195 - AT - Service Tax

Demand of tax raised in SCN in respect of GTO service received by them during the period 16.11.97 to 2.6.98 was paid on 10.12.2002 Commissioner was misconceiving the provisions of law in viewing that Finance Act, 2003 did not grant any extension of time for payment of service tax by recipients of GTO services for the aforesaid period tax was paid within the period allowed by the Finance Act, 2003 as also that allowed by the SC in Gujarat Ambuja Cements case penalty not justified

Summary

Issues:
Demand of service tax, imposition of penalty under Section 76 of the Finance Act, 1994, payment of interest on tax, compliance with provisions of Section 71A of the Finance Act, 1994, interpretation of the Finance Act, 2003 regarding payment of service tax, relief granted by the apex court in a similar case.

Analysis:
The case involved a demand of service tax on the appellants for GTO service received during a specific period. The tax was paid, but the Commissioner imposed a penalty under Section 76 of the Finance Act, 1994, and directed payment of interest on tax. The issue at hand was the imposition of penalty and interest. The Commissioner's decision was challenged in the appeal.

Upon examination, it was noted that a similar penalty was imposed in a previous case, which was later set aside. In that case, the party had paid the service tax with interest before a deadline set by the Supreme Court. The original authority refrained from imposing a penalty as the party had complied with the provisions within the prescribed period.

The Commissioner's order was found to be based on a wrong premise regarding the payment of service tax by the appellants. The Commissioner misconceived the provisions of the law and failed to consider the relief granted by the apex court in a related case. The appellants had paid the tax within the allowed period, as per the Finance Act, 2003, and the apex court's decision. Therefore, they were not liable to be penalized.

In light of the above analysis and following the previous decision, the impugned order was set aside, and the appeal was allowed. The judgment highlighted the importance of timely payment of taxes and compliance with legal provisions to avoid penalties and interest charges.

This detailed analysis of the judgment showcases the legal intricacies involved in the case, including the interpretation of relevant laws, compliance with court directives, and the impact of previous decisions on the current matter.