2016 (3) TMI 108 - AT - Service Tax

Waiver of penalty under Section 77 of the Finance Act, 1994 - Default of registration of Business Auxiliary Service in its registration certificate - Appellant providing the service of goods transport agency for which registered on 1.3.2005 - Received new business activity from abroad on which service tax liability discharged but fails to amend registration certificate - Held that no doubt registration is a paraphernalia to bring the assessee into the fold of law but the assessee was already brought into the fold of law from 1-3-2005. So it cannot be said that it is an unregistered assessee. Only there was an absence of endorsement of the new activity in the registration certificate. That does not amount to default when the assessee consciously discharged tax liability. It does not appear from the conduct of the assessee that it is required to be dealt with coercively under law for the non-endorsement of the different activity which was carried out subsequently. Therefore, penalty imposed under Section 77 is waived off. - Decided in favour of appellant

Summary

Issues: Penalty under Section 77 of the Finance Act, 1994 for non-endorsement of new activity in registration certificate.

In this judgment by the Appellate Tribunal CESTAT Chennai, the appellant, a goods transport agency, was penalized under Section 77 of the Finance Act, 1994 for not amending its registration certificate to include business auxiliary service from abroad. The appellant argued that despite the absence of endorsement in the registration certificate, it had discharged the service tax liability under the deeming provision of law, showing no default in tax payment. The Revenue supported the lower authorities' decision. The Tribunal noted that registration is crucial to comply with the law, but the appellant was already registered as a goods transport agency since 1-3-2005. The Tribunal emphasized that the absence of endorsement for the new activity did not constitute a default, especially when the tax liability was consciously discharged. The Tribunal found no coercive action necessary against the appellant for the non-endorsement of the additional activity in the registration certificate. Consequently, considering the appellant's registration status and the absence of deliberate default causing revenue evasion, the penalty under Section 77 was waived, and the appeal was allowed. The judgment highlights the importance of registration in tax compliance and the significance of conscious tax liability discharge in determining penalties under the law.