2010 (1) TMI 387 - AT - Service Tax

Cable Operator Services- The issue involved in this case is regarding the Service tax liability of the respondent under the category of Cable Operator Services for the period August 2002 to September 2005. Held that- The impugned order to the extent it sets aside the interest liability imposed under Section 75 of the Finance Act, 1994 is set aside and the appeal of the Revenue to that extent is allowed. In sum, the appeal of the Revenue is partly allowed to the extent of liability of interest on the respondent and is partly rejected to the extent of penalty. Appeal disposed off accordingly.

Summary

Issues:
Service tax liability of the respondent under 'Cable Operator Services' for August 2002 to September 2005.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal confirming the Service tax liability of the respondent but setting aside penalties and interest. The respondent had not taken registration or discharged the Service tax liability initially. The Adjudicating Authority confirmed the demand with penalties and interest. The Commissioner (Appeals) upheld the Service tax liability but set aside penalties and interest. The Revenue challenged the non-imposition of interest, arguing that Section 75 mandates interest on belated payment of Service tax.

Upon review, the Tribunal found that the respondent had paid the entire Service tax liability, Education Cess, and interest after being informed by the authorities. The Tribunal referred to Section 73(3) of the Finance Act, stating that once the Service tax liability is paid, penal provisions do not apply. Citing a previous case, the Tribunal agreed with the Commissioner (Appeals) that penalties could be set aside due to the respondent's lack of awareness as a small cable operator. Therefore, penalties under Section 76 and 78 were waived under Section 80 of the Finance Act.

Regarding interest liability, the Tribunal acknowledged the clear provisions of Section 75, directing the respondent to discharge the interest liability determined by the lower authorities. The Tribunal set aside the order that waived interest liability and allowed the Revenue's appeal on this point. In conclusion, the Tribunal partly allowed the Revenue's appeal by upholding the interest liability on the respondent and partly rejected it concerning penalties.

This detailed analysis of the judgment highlights the legal arguments, statutory provisions, and the Tribunal's reasoning behind the decision on the Service tax liability issue involving 'Cable Operator Services' for the specified period.