2013 (4) TMI 670 - AT - Service Tax

Waiver of penalty - Invocation of section 80 As per revenue appellant has not discharged service tax liability on the commission amount reimbursed by Vodafone to them. - adjudicating authority, after confirming the demand and appropriating the amounts paid by the appellant, dropped the proceeding of imposition of penalty by invoking the provisions of Section 80 - Held that - Hon ble High Court of Karnataka in the case of Sunitha Shetty 2009 (9) TMI 1 ,and Tanaton Vision 2012 (12) TMI 233 clearly lay down the proposition that once the adjudicating authority has exercised his discretion for setting aside the penalty under Section 80 of the Finance Act, 1994, that attains finality. - Thus, the impugned order is set-aside. appeal is allowed.

Summary

Issues:
1. Waiver of penalty under Section 78 of the Finance Act, 1994.

Analysis:
The judgment revolves around a stay petition seeking waiver of a penalty imposed under Section 78 of the Finance Act, 1994. The appellant had discharged the service tax liability and interest before the issuance of a show cause notice. The first appellate authority imposed the penalty under Section 78 based on the grounds that the adjudicating authority did not discuss the reasons for granting a waiver of penalties under various sections by invoking Section 80. However, the adjudicating authority had invoked Section 80 after considering the appellant's compliance history, cooperation in inquiries, and timely payment of service tax, leading to the conclusion that Section 80 could be applied to set aside penalties.

The judgment references the Hon'ble High Court of Karnataka's decision in a similar case, emphasizing that once the adjudicating authority exercises discretion to set aside penalties under Section 80, it becomes final. Citing the case of Sunitha Shetty and Tanaton Vision, the judgment affirms that the adjudicating authority's discretion under Section 80 is conclusive, and any appeal against this exercise of discretion is not maintainable. Therefore, the impugned order imposing the penalty under Section 78 is deemed unsustainable and set aside, allowing the appeal.

In conclusion, the judgment highlights the importance of Section 80 in providing relief from penalties under the Finance Act, 1994, emphasizing that once the adjudicating authority exercises discretion under this section, it cannot be challenged. The decision underscores the significance of considering the service provider's compliance history and cooperation in inquiries when determining the applicability of Section 80 to waive penalties.