2010 (2) TMI 453 - AT - Service Tax

Penalty - The assessees challenge the imposition of penalty under the provisions of sections 76, 77 and 78 of the Finance Act, 1994 on the ground that nonpayment of service tax during the relevant period was entirely due to ignorance on their part. Held that - since the revenue had failed to establish that there was any suppression on part of assessee so as to warrant imposition of penalties under section 76 and 78 were to be set aside. Further held that - since ingredient of suppression of non-submission of returns was not relevant with respect to section 77, penalty u/s 77 was to be upheld.

Summary

The Appellate Tribunal CESTAT, Chennai set aside penalties under sections 76 and 78 of the Finance Act, 1994 due to ignorance of tax liability. Penalty of Rs. 1,000 under section 77 was upheld. The appeal was partly allowed.