2010 (2) TMI 296 - AT - Service Tax

Penalty - failure to follow statutory provisions including payment of service tax due on service under the category authorised service station rendered Held that - that the respondent was liable to pay the tax it paid the service tax along with applicable interest for the delay in payment of the same before issue of the show cause notice. Vide the impugned order the Commissioner (Appeals) found that no willful suppression of facts or intention to evade payment of duty on the part of the respondents was found by the Asst. Commissioner. Since the respondents had paid the service tax along with applicable interest before issue of show cause notice and no fraud or willful intention on the part of the respondent was found by the authorities in terms of provisions contained in Section 73(3) of the Act no further proceedings were warranted

Summary

Issues: Appeal against imposition of penalties under various sections of the Finance Act, 1994 for failure to pay service tax on services rendered under 'authorised service station' category.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner (Appeals) vacating penalties imposed on the respondents for not paying service tax on services provided under the 'authorised service station' category from 2002-03 to 2005-06.
2. The respondents had not discharged their tax liability initially but paid the service tax along with interest upon being notified by the Department before any show cause notice was issued.
3. The Commissioner (Appeals) found no willful suppression of facts or intention to evade payment of duty by the respondents, as confirmed by the Asst. Commissioner.
4. As per Section 73(3) of the Act and Circular No. F. No. 137/167/2006-CX.-4 dated 3-10-2007 issued by the CBEC, no further proceedings were warranted if the tax along with interest was paid before the show cause notice.
5. The impugned order rightly vacated the penalties, considering the absence of fraud or willful intention on the part of the respondents.
6. Consequently, the appeal by the Revenue was dismissed for lacking merit, affirming the decision to vacate the penalties imposed on the respondents.