2013 (8) TMI 565 - AT - Service Tax

Imposition of penalty Section 76 revenue file appeal for imposition of penalty Held that - There was no intention to evade payment of service tax as he already deposited tax with interest assessee is an individual engaged as a land broker in the unorganized sector and as such not well versed with the nuances of taxation - assessee had neither collected any service tax from their clients as provision of service nor have charged or claimed the service tax from their clients - The claim that they came to know about the service tax liability only after investigation by the department no reason to interfere with the order of the Commissioner (Appeals) - appeal decided against the Revenue.

Summary

Issues: Revenue appeal against imposition of penalties under Section 76, 77, and 78 of the Act rejected by Commissioner (Appeals).

Analysis:
The Revenue filed an appeal against the Order-in-Appeal passed by the Commissioner of Customs & Central Excise (Appeals) regarding the imposition of penalties under Section 76, 77, and 78 of the Act. The case involved a respondent registered as a "Real Estate Agent" who rendered services to a company in procuring land and received a commission. Upon detection by the Internal Audit, the respondent deposited the tax amount along with interest. The adjudicating authority confirmed the tax demand and interest but dropped the penalty under Section 80 of the Finance Act, 1994. The Revenue appealed to the Commissioner (Appeals) seeking penalties under various sections, which was rejected.

The authorized representative for the Revenue argued that the respondent did not pay the tax voluntarily but only after detection by the Internal Audit, thus, not eligible for the benefit under Section 80 of the Act. The defense relied on case laws to support this stance. On the other hand, the respondent's counsel highlighted that the respondent paid the tax immediately upon detection, claiming no intention to evade payment and lack of knowledge about the tax liability. The respondent, being an individual land broker in the unorganized sector, paid the tax voluntarily without any malicious intent, further supported by filing the ST-3 return after payment.

The Commissioner (Appeals) considered the mitigating circumstances, including the immediate payment of tax and interest upon detection by the audit, as a reason to apply Section 80 of the Finance Act, 1994. The order emphasized that the respondent's lack of intention to evade tax and the voluntary payment, despite being unaware of the tax liability, warranted exoneration from penalty under Section 80. The judgment highlighted that each case should be examined based on individual facts and circumstances, and there cannot be a uniform set of principles for applying Section 80.

In conclusion, after reviewing all aspects of the case and considering the arguments presented, the judgment upheld the decision of the Commissioner (Appeals) to dismiss the Revenue's appeal. The order emphasized the respondent's immediate tax payment upon detection, lack of malafide intent, and the application of Section 80 based on the specific circumstances of the case.