2009 (6) TMI 516 - AT - Service Tax

Penalty- The appellants who are an educational institution are challenging the imposition of penalty of Rs. 70,000 for delay in payment of service tax leviable upon them. According to the appellants, they are not liable to pay any penalty for the reason that there was a reasonable cause for the failure to pay the tax as they were an educational institution and they had paid service tax leviable prior to the issue of the show-cause notice. Held that- as the penalty has already been reduced from Rs. 1,33,594 equal to the service tax demand to Rs. 70,000 by the lower appellate authority. No ground has been made out for any further reduction. I, therefore, uphold the impugned order and reject the appeal.

Summary

The Appellate Tribunal CESTAT, Chennai upheld the penalty of Rs. 70,000 on an educational institution for delay in service tax payment. The institution's plea under section 80 of the Finance Act was rejected as the tax demand was confirmed and penalty already reduced from Rs. 1,33,594 to Rs. 70,000. The appeal was rejected.