2009 (12) TMI 175 - AT - Service Tax

Penalty- the appellants challenge the imposition of penalties under the provisions of sections 76 and 78 of the Finance Act, 1994 on an application of the extended period of limitation, and also under section 77 of the Act on the ground that the non-payment of service tax during the periods in dispute was due to ignorance and not due to any deliberate intention to evade payment of tax. Held that- accept the explanation of the assessees that the non-payment of service tax during the relevant periods was not with any intention to evade tax and, therefore, set aside penalties imposed on both the appellants and allow the appeals.

Summary

The Appellate Tribunal CESTAT, Chennai ruled in favor of the appellants, setting aside penalties imposed under sections 76, 78, and 77 of the Finance Act, 1994. The partners were found unaware of their service tax liability until informed by officers, leading to belated payment and registration. The Revenue failed to prove suppression by the assessees, leading to the penalties being overturned. The appeals were allowed.