2009 (8) TMI 304 - AT - Service Tax

Demand under Commercial training and Coaching services Penalty The appellant is a national standard body constituted under the BIS Act, 1986 coming under the administrative control of the Ministry of Consumer Affairs, Food & Public Distribution, Government of India. In this case Tri.-(Del.) by considering the claim of appellant that they had a bona fide belief that their that their activities will not attract service tax held that the appellants had reasonable cause for their failure in registering themselves for paying service tax and subsequently, on coming to know of the legal position they have complied with the provisions of law. Considering the nature of the organisation, nature of activities undertaken by them and absence of arty intention to evade service tax, it is a fit case for invoking the provision of Section 80 of the Finance Act, 1994. The appeal is allowed by setting aside the penalty.

Summary

The Appellate Tribunal CESTAT, New Delhi, heard an appeal contesting the imposition of a penalty in relation to the demand of service tax of Rs. 8,11,074. The appellant, a national standard body, charged fees for training programs and was under the belief that their activities were exempt from service tax until they received clarification from the CBEC. The Commissioner (Appeals) reduced the penalty to Rs. 1 lakh under Section 78. The Tribunal found that the appellant had reasonable cause for not registering for service tax and subsequently complied with the law, invoking Section 80 of the Finance Act, 1994. The appeal was allowed, and the penalty was set aside. The case highlights the importance of obtaining clarifications and complying with tax obligations.