2017 (1) TMI 1188 - AT - Service Tax

Renting of Immovable Property Service - imposition of penalty - malafide intention - Held that - the enquiry letter was issued before deposit of the tax. I find on this particular issue, the Tribunal already held that no penalty would be imposed. Hence there is no reason to interfere with the impugned order - Reliance placed in the case of M/s Amiresh Baruah Vs. CCE & ST, Dibrugarh 2014 (1) TMI 515 - CESTAT KOLKATA , where on similar issue, penalty was set aside, as malafide intention was not there. In absence of any malafide intention proven, penalty set aside - appeal rejected - decided against Revenue.

Summary

Issues:
Appeal against order of Commissioner (Appeals) for imposition of penalty under Service Tax on "Renting of Immovable Property Service".

Analysis:
The appeal was filed by Revenue against the order of the Commissioner (Appeals) regarding the demand of Service Tax on "Renting of Immovable Property Service". The respondent had paid the demanded amount along with interest, and no penalty was imposed initially due to lack of malafide intention. The Commissioner (Appeals) upheld the adjudication order, leading Revenue to file this appeal.

Upon hearing both sides and reviewing the records, the Tribunal considered the relevant facts of the case. The advocate representing the respondent argued that confusion arose due to a stay granted by the High Court, which led to delayed payment of Service Tax. The respondent eventually paid the tax with interest upon realizing their liability. The Tribunal referenced a similar case where the appeal was allowed based on the timing of the taxable activity and the respondent's prompt payment upon awareness of their tax liability.

The Tribunal noted that the Commissioner had not imposed separate penalties under various sections of the Finance Act, 1994. It was established that the respondents, who were doctors by profession, promptly paid the Service Tax and interest upon being informed of their liability. The Tribunal emphasized that composite penalty under different provisions is impermissible. Consequently, the Tribunal found no fault with the Assistant Commissioner's decision not to impose penalties, setting aside the adjudication order and allowing the appeal.

The grounds of appeal by Revenue were reviewed, and it was noted that the facts were not disputed. The Revenue argued that an enquiry letter was issued before the tax deposit, but the Tribunal had already ruled against imposing penalties in such cases. Therefore, the Tribunal rejected the appeal filed by Revenue, affirming the decision of the Commissioner (Appeals) and disposing of the case.

In conclusion, the Tribunal upheld the decision to not impose penalties on the respondent for delayed payment of Service Tax on "Renting of Immovable Property Service", based on the circumstances of the case and relevant legal precedents.