2010 (11) TMI 438 - AT - Service Tax

Penalties u/s 76, 77 and 78 - The Commissioner (Appeals) has set aside penalties by applying the provisions of Section 80 of the Finance Act, 1994 holding that the assessees had a bona fide belief that they were entitled to small scale exemption during the financial year 2005-06 and were not aware of the fact that they were not entitled to exemption up to Rs. 4 lakhs as they were using the brand name of the major organization in the field of computer education - The franchisee was situated in rural background; that the assessees provided educational service mainly to poor students and relied upon the payment of entire service tax and interest immediately on receipt of the show-cause notice. Held that dislodge the above findings - No reason to interfere with the impugned order - Hence reject the appeal, after upholding the impugned order.

Summary

The Appellate Tribunal CESTAT, Chennai, upheld service tax and interest against the respondents but set aside penalties imposed under Sections 76, 77, and 78 of the Finance Act, 1994. The Commissioner (Appeals) found that the assessees had a reasonable cause for failure to pay service tax and were not aware they were not entitled to exemption. The appeal was rejected, and the impugned order was upheld on 22-11-2010.