2006 (4) TMI 28 - AT - Service Tax

Service Tax Appellant paid service tax liability and interest thereon before 30-10-2004 under amnesty scheme as advertised by CBEC Penalties set aside

Summary

Issues:
Imposition of penalty under Section 75A, 76, and 77 of the Finance Act, 1944 for non-payment of Service Tax liability; Non-filing of returns and non-compliance with registration certificate rules; Extension of amnesty scheme benefits to the appellant.

Analysis:
The Stay application pertains to challenging the penalty imposed on the appellant for non-payment of Service Tax liability under Section 75A, 76, and 77 of the Finance Act, 1944. The appellant had already deposited the Service Tax liability and interest before the show cause notice was issued. Consequently, the pre-deposit of penalties was dispensed with, and the appeal was taken up for disposal with the consent of both parties.

The records indicate that the appellant discharged the service tax liability on multiple dates before the show cause notice was issued for penalty imposition. The issue at hand involves penalties for non-payment of service tax, non-filing of returns, and non-compliance with registration certificate rules. Notably, a circular issued by the CBEC provided an amnesty scheme for individuals who had failed to obtain the registration certificate and pay the service tax liability. This scheme required registration and payment of the service tax liability and interest before a specified date.

Considering the appellant's compliance with the service tax liability and interest payment before the deadline specified in the amnesty scheme, the appellant should be entitled to the benefits of the scheme. The amnesty scheme aimed to provide relief from penal proceedings for individuals who fulfilled the prescribed requirements, which the appellant in this case has done by meeting the payment obligations within the stipulated timeframe.

Based on the above considerations, the order-in-appeal upholding the penalty imposition was set aside, and the appeal was allowed. The Stay application was also disposed of, thereby granting the appellant the benefits of the amnesty scheme and relief from penal proceedings as advertised by the CBEC.

This judgment highlights the importance of timely compliance with tax obligations and the potential benefits available under amnesty schemes for rectifying past non-compliance issues within the specified deadlines to avoid penal consequences.