2009 (7) TMI 479 - AT - Service Tax

Service Tax paid before issuing Show Cause Notice Penalty The Appellants are authorized dealer of Mauruti Udhyog Ltd. they were receiving commission from M/s Maruti Udhog Ltd. for arranging loan to the customers. The Appellant deposited Service Tax of Rs. 5,02,443/- along with interest of Rs. 63,735/- before issuing the SCN In this case Tri-(Del.)-held that the appellants are not contesting the payment of tax along with interest, which they have already deposited long before issue of show cause notice. In view of that, penalties are not sustainable. Accordingly, penalties are set aside. The appeal is allowed with consequential relief.

Summary

The Appellate Tribunal, New Delhi, in the case of Shri P.K. Das, Member (J), 2009 (7) TMI 479 - CESTAT, ruled in favor of the appellants who were contesting penalties imposed on them for receiving commission from Maruti Udyog Ltd. for arranging loans. The appellants had deposited the tax amount along with interest as soon as they became aware of the tax liability. The tribunal found that confusion existed during the relevant period regarding the levy of service tax on such activities, leading to the conclusion that the penalties were not justified. As a result, the penalties were set aside, and the appeal was allowed with consequential relief. The judgement highlights the importance of promptly addressing tax liabilities and the impact of regulatory clarity on penalty decisions. The case underscores the need for businesses to stay informed about tax obligations and promptly address any potential issues to avoid penalties.