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2017 (1) TMI 1239 - AT - Service TaxCommercial and industrial construction - demand for the period prior to 1.6.2007 - Held that - the tax along with interest has been paid before the issue of SCN; a lenient view has been taken with regard to the penalties by invoking Section 80 of the Finance Act and penalties rightly dropped - reliance placed in the case of CCE vs. Lawson Travel and Tours (I) Pvt. Ltd. 2015 (1) TMI 232 - MADRAS HIGH COURT - appeal dismissed - decided against Revenue.
Issues: Appeal against dropping of penalties under Sections 76, 77, and 78 of the Finance Act.
Analysis: The Department filed an appeal against the order passed by the Commissioner (A) in favor of the assessee. The respondent, engaged in construction services, was found to have not paid service tax or filed returns on time. A show-cause notice was issued demanding payment of service tax along with interest. The original authority confirmed the demand and imposed penalties under Sections 76, 77, and 78 of the Finance Act. The assessee appealed, and the Commissioner (A) observed that the levy under Section 65(105)(zzq) had been quashed by the apex court, making the demand prior to 1.6.2007 not tenable. The Commissioner (A) considered the circumstances, set aside the penalties, and held the service tax paid during that period as refundable. The Revenue appealed against the dropping of penalties. The Tribunal heard both parties and considered the arguments. The Appellant argued that the Commissioner (A) did not discuss any reasonable cause for invoking Section 80 and that the decision on service tax liability was not legal. The Respondent defended the order, stating that the Commissioner (A) had rightly dropped the penalties under Section 80 due to the timely payment of tax and interest. The Respondent cited relevant case law to support their position. After reviewing the submissions and relevant case law, the Tribunal found no illegality or infirmity in the Commissioner (A)'s order. Consequently, the Tribunal upheld the impugned order and dismissed the Revenue's appeal against dropping the penalties under Sections 76, 77, and 78 of the Finance Act.
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