2015 (9) TMI 1385 - AT - Service Tax

Renting of Immovable Property Service - Penalty u/s 76, 77 & 78 - Held that - If the tax is due as on 6 th of March, 2012 and if the same has been paid alongwith interest within period of six months from the date on which the Finance Bill, 2012 received the assent of the President, no penalties shall be imposable for failure to pay the service tax. - Demand is for the period 2007-2011 and the same was payable on 6 th day of march 2012. The liability of service tax in full alongwith interest has been discharged within the six month from the date on which Finance Bill received assent of the President, which was ending on 28/11/2012, the appellant has paid liability on 26/11/2012. In this undisputed facts, appellant has made out a clear case for waiver of penalties in terms of Section 80(2) of the Finance Act, 1994. I therefore invoking Section 80(2) set aside the penalties imposed under Section 76, 77 and 78 of the Finance Act. - The appellant has not pressed made this discrepancy either before the adjudicating authority or before the Commissioner (Appeals) and no documentary evidence was submitted before the said lower authorities. Therefore same cannot be verified at this stage therefore demand is upheld - Penalties are set aside - Decided in favour of assessee.

Summary

Issues:
- Appeal against Order-in-Appeal upholding Order-in-Original and rejecting appellant's appeal.
- Failure to obtain service tax registration and pay applicable service tax for renting immovable property.
- Proposals for demand, recovery of service tax, interest, and penalties under relevant sections of Finance Act, 1994.
- Appellant's plea for waiver of penalties and dropping of demand based on specific provisions of Finance Act, 2012.
- Invocation of Section 80(2) for immunity from penalties for failure to pay service tax.
- Discharge of service tax liability with interest within the specified period.
- Decision on penalties, demand, and interest by the Tribunal.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai challenged the Order-in-Appeal that upheld the Order-in-Original, which rejected the appellant's plea regarding service tax on renting immovable property. The appellant, a cooperative society, had received rent without obtaining service tax registration, leading to a demand for service tax, interest, and penalties under various sections of the Finance Act, 1994. The Commissioner (Appeals) had affirmed the original order, prompting the appellant to appeal further.

During the hearing, the appellant did not appear, allowing the Tribunal to proceed with the case. The Revenue representative reiterated the findings of the impugned order, emphasizing the service tax liability on renting services from 2007 to 2011. The appellant sought waiver of penalties under Section 76, 77, and 78, and requested dropping of a specific demand amount, citing a tax refund payment to a local body under a relevant notification.

The Tribunal considered the appellant's submissions and the provisions of the Finance Act, 2012, particularly Section 80(2), which granted immunity from penalties for failure to pay service tax if the tax and interest were paid in full within a specified period. As the appellant had settled the service tax liability with interest before the deadline, the Tribunal invoked Section 80(2) to waive the penalties under Sections 76, 77, and 78.

However, regarding the demand amount in question, the Tribunal noted the lack of evidence or contest from the appellant before the lower authorities, leading to the demand being upheld. Ultimately, the Tribunal granted the appeal in part, waiving the imposed penalties but maintaining the demand for service tax along with interest. This decision was based on the specific provisions of the Finance Act, 2012, and the timely settlement of the service tax liability by the appellant.