2006 (5) TMI 22 - AT - Service Tax

Service Tax When service tax paid before issuance of show cause notice, there is no need to pay penalty for delay in payment of tax - Delay in filing return as delay was due to delayed registration of assessee, penalty not imposable

Summary

Issues:
1. Condonation of delay of appeal
2. Waiver of pre-deposit and stay of recovery in relation to a penalty amount
3. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994

Analysis:
1. The first issue pertains to the delay of appeal. The delay, which was satisfactorily explained, was condoned after hearing both sides and considering their submissions. The Tribunal found the explanation acceptable and proceeded with the appeal.

2. The second issue involves the waiver of pre-deposit and stay of recovery concerning a penalty amount. The Tribunal examined the records and decided to dispense with the pre-deposit requirement. Subsequently, the appeal was taken up for final disposal after considering both parties' submissions.

3. The third issue revolves around the imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The department initially found a short payment of service tax by the assessee for maintenance and repair services. Despite the assessee paying the tax with interest, penalties were proposed and imposed under the mentioned sections. The Commissioner (Appeals) reduced one penalty but upheld the rest. However, the Tribunal, following relevant case law, set aside the penalties imposed under Sections 76 and 77. The penalty under Section 78 was paid by the party, and the appeal was allowed, modifying the impugned order accordingly.

In conclusion, the Tribunal addressed the issues of delay of appeal, waiver of pre-deposit, and imposition of penalties under different sections of the Finance Act, 1994. The decision was made after thorough consideration of submissions from both parties and in alignment with relevant legal precedents.