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2009 (7) TMI 552 - AT - Service TaxPenalty- Taxpayer Friendly Scheme dated 20-9-2004 issued from D.O.F. No. 137/39/2004-CX.4.- The assessee was rendering Manpower recruitment service The revenue found that the assessee had not discharged the service tax liability on the value of services realized during the period 19.5.2000 to March, 2005 and had not filed returns. Accordingly a show cause notice was issued demanding service tax short paid and penalty under section 76. The adjudicating authority confirmed the demand which was upheld by the commissioner (Appeals). The assessee pleaded for immunity from penalty on ground that it had discharged entire service tax liability and interest thereon before the expiry of the Extraordinary Taxpayer Friendly Scheme, dated 20.9.2004 issued by DOF No. 137/139/2004-CX.4. In the light of the decision of Union of India v. Amit Kumar Maheshwari 2009 -TMI - 32163 - HIGH COURT RAJASTHAN, held that- it is a fit case to invoke section 80 and set aside the penalties. The appeal is allowed.
Issues:
Non-payment of service tax for the period May 2000 to March 2005, applicability of the Extraordinary Taxpayer Friendly Scheme, penalty imposition for non-payment of service tax, benefit under the Amnesty Scheme, invocation of sections 76 and 80 for setting aside penalties. Analysis: The case involved a dispute regarding non-payment of service tax by the appellant for the period between May 2000 to March 2005. The lower authorities confirmed the demand for the short-paid service tax and imposed penalties under section 76 of the Finance Act, 1994. The appellant argued that they had discharged the entire service tax liability before the expiry of the Extraordinary Taxpayer Friendly Scheme. The Tribunal noted that the appellant had paid the service tax due up to October 2004 before the Amnesty Scheme deadline. Citing a judgment of the Hon'ble High Court of Rajasthan, the Tribunal held that penalties imposed by the Adjudicating Authority for infractions up to October 2004 should be set aside, as the Amnesty Scheme applied to registered assessees who had defaulted but later paid their dues. The Adjudicating Authority also confirmed the demand for service tax from November 2004 to March 2005, which the appellant paid along with interest before the show-cause notice. The appellant claimed that they misunderstood the provisions and promptly paid the liability once informed. The Adjudicating Authority imposed a penalty for this period, but the Tribunal invoked section 80 to set aside the penalty. It was noted that the appellant paid the service tax quarterly, leading to a delay in payment to the government. The Tribunal found this to be a case of misunderstanding by the appellant, warranting the setting aside of penalties under section 80. Consequently, the penalties imposed for the period from November 2004 to March 2005 were also overturned. In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.
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