2010 (7) TMI 121 - AT - Service Tax

Penalty u/s 78 - The tax demand is not disputed by the assessees and stands paid. The explanation put forth by the assessees for non-payment of service tax within time is that there was no intention to evade payment of tax as the entire amount of tax was available to them by way of credit and in fact they have taken credit. Held that - Considering the fact that the entire amount of tax demand is available to the assessees as credit, no intention to evade payment of tax can be established against them. Hence, the penalty imposed under Section 78 cannot be sustained - The appeal is thus allowed by setting aside the penalty.

Summary

The Appellate Tribunal CESTAT, Chennai decided to set aside the penalty of Rs. 48,252 imposed under Section 78 of the Finance Act, 1994. The tax demand was paid, and the assessees had a valid explanation for the delay in payment. The penalty was revoked as there was no intention to evade tax, and the appeal was allowed.