2013 (1) TMI 634 - AT - Service Tax

Non-imposition of penalty u/s 76 - invoking section 80 - assessee had short paid the Service Tax before issuance of show cause notice along with interest - Held that - The justification given by the assessee has been accepted by both the lower authorities that there is no intention to evade Service Tax liability. Thus as decided in Kalamna Market Urben (2010 (7) TMI 200 - CESTAT, MUMBAI) and Singla Finance Services (2010 (6) TMI 136 - CESTAT, NEW DELHI) that if Service Tax liability is discharged before issuance of show cause notice, the provision of Section 80 can be brought into play and penalty can be waived - in favour of assessee.

Summary

Issues:
Non-imposition of penalty under Section 76 of Finance Act, 1994 invoking provisions of Section 80 of Finance Act, 1994.

Analysis:
The appeal was filed by the Revenue against Order-in-Appeal No.41/2011/COMMR(A)/CMC/RAJ, dated 09.03.2011. The respondent did not appear or provide representation, and there was no request for an adjournment. Due to the narrow scope of the issue, the appeal was taken up for disposal in the absence of the respondent. The ld.D.R. was heard, and the records were examined. The main issue revolved around the non-imposition of penalty under Section 76 of the Finance Act, 1994, invoking Section 80 of the same Act. The Revenue contended that penalty should have been imposed as the assessee had short-paid the Service Tax for a specific period despite being registered and paying taxes regularly. The ld.D.R. argued that the mere discharge of tax liability before the show cause notice was not a reasonable cause to avoid penalty.

The Tribunal considered the submissions made by the ld.D.R. and reviewed the records. It was noted that the assessee had indeed short-paid the Service Tax before the issuance of the show cause notice, along with interest. Both lower authorities had accepted the justification provided by the assessee, concluding that there was no intention to evade the Service Tax liability. The Tribunal referenced previous decisions, including Kalamna Market Urben 2010 (20) STR 205 (Tri-Mum.) and Singla Finance Services 2010 (20) STR 642 (Tri-Del.), which supported the view that if the Service Tax liability is discharged before the show cause notice, penalty under Section 80 could be waived. The Tribunal found no reason to interfere with the well-reasoned order of the first appellate authority, affirming that the impugned order was legally sound and free from any defects. Consequently, the appeal filed by the Revenue was rejected. The judgment was dictated and pronounced in court by Mr. M.V. Ravindran, J.