2012 (4) TMI 404 - AT - Service Tax

Setting aside the penalties under Section 76 & 77 by first appellate authority Held that - For the period October 2004 to March 2006 photocopies of the Service Tax returns filed have been produced depicting that it has been filed with Superintendent of Service Tax, Range Gandhidham - the same has been filed in time and hence no penalty can be imposed under Section 77 - For Quarter July 2006 to September 2006 Form ST-3 return produced by the assessee specifically indicating the taxable service rendered from said Quarter is Nil - if there are no services rendered during the relevant period there cannot be any demand of Service Tax liability and consequently no delayed payment against revenue

Summary

Issues:
Appeal against setting aside penalties under Section 77 for non-filing of return and under Section 76 for delayed payment of Service Tax.

Analysis:
1. Penalty under Section 77 for non-filing of return:
The Revenue appealed against the setting aside of penalties under Section 77 by the first appellate authority. The first appellate authority found that the Service Tax returns for the relevant periods were filed in time, as evidenced by photocopies produced during the personal hearing. The appellate tribunal noted that the Revenue did not challenge this factual finding. Therefore, the tribunal upheld the first appellate authority's decision to set aside the penalties under Section 77.

2. Penalty under Section 76 for delayed payment of Service Tax:
Regarding the penalty under Section 76 for delayed payment of Service Tax for the quarter ending September 2006, the tribunal examined the ST-3 return submitted by the assessee. The return indicated nil taxable service rendered during the period in question. As there was no service provided, the tribunal concurred with the first appellate authority that there was no Service Tax liability, and hence no delayed payment of tax. Consequently, the tribunal affirmed the decision of the first appellate authority to set aside the penalty under Section 76.

3. Conclusion:
After considering the submissions and evidence presented by both parties, the tribunal concluded that the penalties under Section 77 and Section 76 were correctly set aside by the first appellate authority. As there was no basis for imposing these penalties, the appeal filed by the Revenue was rejected, and the decision of the first appellate authority was upheld.