2018 (6) TMI 11 - AT - Service Tax

Demand of Interest - quantification of Interest - Renting of Immovable Property service - Main grievance of the appellant is that the computation made by the adjudicating authority is incorrect which should have been as per the computation provided before this forum - Penalty - Held that - The issue with regard to the interest is set aside to the file of the adjudicating authority who is to verify the computation as provided by the appellant and if the same is in accordance with law, then the same is required to be demanded, if the appellant has not paid so far - matter on remand. Penalty u/s 76 & 77 - Held that - The Revenue has nowhere suspected bonafides of the appellant in not remitting the service tax. Section 80 makes it very clear that the penalty u/s 76 & 77 is not automatic, which definitely overrides both the provisions of Section 76 as well as Section 77. It is also not in dispute that the appellant had paid nearly 80% of the tax amount before the issuance of SCN - The appellant had made out a case and that it is a fit case to invoke the provisions of Section 80 especially in view of the fact that the appellant has not contested the service tax liability and interest thereon - penalty set aside. Part matter on remand and part in favor of assessee.

Summary

Issues: Change of cause title, Service tax liability, Interest computation, Penalty under Section 76 & 77

Change of Cause Title:
The judgment addresses a miscellaneous application for a change of cause title due to a change in jurisdiction and address of the respondent. The application is allowed, changing the jurisdiction and address from CST Chennai-I to The Commissioner of GST & Central Excise, Chennai North Commissionerate.

Service Tax Liability:
The appellant, an individual providing taxable service under "Renting of Immovable Property," faced a dispute regarding service tax for the periods from April 2012 to March 2013 and April 2013 to March 2014. The appellant received rental income, leading to a service tax liability of ?7,11,745. After audit officers pointed out the liability, the appellant remitted ?5,48,664 on two different dates. The Revenue issued a show-cause notice proposing the service tax demand along with interest and penalties. The appellant did not reply to the notice, leading to the adjudicating authority confirming the demand, interest, and penalties. The appellant's appeal to the Commissioner of Central Excise (Appeals-I) was unsuccessful, resulting in the appeal to the forum.

Interest Computation:
The appellant contested the interest computation, claiming it was incorrect and should align with the computation provided to the forum. The forum directed the adjudicating authority to verify the computation as per the appellant's submission and demand the correct amount if not paid by the appellant.

Penalty under Section 76 & 77:
Regarding penalties under Section 76 & 77, the appellant argued that payment of 80% of the tax amount before the notice and the absence of collecting service tax from tenants established a reasonable cause. The appellant cited specific cases and provided ledger copies to support the claim. The Revenue contended that the admission of liability warranted penalties. The forum invoked Section 80, noting the appellant's payment before the notice and lack of contesting the tax liability. Consequently, the penalties imposed by the adjudicating authority and confirmed by the Commissioner (Appeals) were set aside, and the appeal was disposed of accordingly.