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2023 (9) TMI 1099 - AT - Service TaxNon-payment of service tax - gross amounts collected from the clients for rendering the service on the due date specified in Rule 6 of the Service Tax Rules, 1994 r/w sec. 68 of the Finance Act, 1994 - failure to file ST-3 returns - HELD THAT - The appellant has paid the service tax involved and the same has been appropriated to Government by the impugned order. Further interest is necessarily linked to the duty payable, and such liability arises automatically by operation of law. As per the Hon ble Supreme Court's judgment in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. 2009 (7) TMI 6 - SUPREME COURT interest is to be paid on delayed or deferred payment of duty for whatever reasons. The status of payment of interest could not be ascertained as the appellant has not indicated the same and they were also not represented before us whenever the matter came up for hearing. One of the issues involved in the appeal is whether taxes on lands and buildings in Entry 49, List II of the Seventh Schedule to the Constitution contemplate a tax levied directly on the land as a unit having definite relationship with the land? In a case where the constitutional validity of the levy is yet to be decided the dispute is interpretational in nature. Hence there exists sufficient cause for the appellant not to have paid the tax due on time and there does not appear to have been any intention on their part to evade payment of duty. Hence, they are eligible for a waiver of penalties as per section 80 of the Finance Act 1994. Appeal allowed in part.
Issues involved:
The issues involved in this case are non-payment of service tax, failure to file ST-3 returns, imposition of penalties, and waiver of penalties under section 80 of the Finance Act, 1994. Non-payment of service tax and imposition of penalties: The appellant provided 'Renting of Immovable Property Service' as defined in section 65(105)(zzzz) of the Finance Act, 1994. They failed to pay service tax of Rs.2,62,124/- on the gross amounts collected from clients and did not file ST-3 returns. The Show Cause Notice proposed a demand for service tax, interest, penalties, and late fee. The original authority confirmed the demand with interest and penalties, which was upheld by the Commissioner (Appeals). The appellant appealed to the Tribunal against this decision. Failure to appear for hearings and waiver of penalties: Despite multiple hearing dates, the appellant did not appear before the Tribunal. The Tribunal granted a waiver of pre-deposit and stay of recovery in a previous order, but the appellant did not actively pursue the appeal. The Tribunal gave one more opportunity for the appellant to appear, but they failed to do so. Consequently, the Tribunal proceeded to hear the appeal based on submissions by the Revenue. Arguments and decision: The Revenue argued that renting of immovable properties by the Panchayat falls under the taxable service category, and the appellant is liable to pay service tax. The appellant accepted the duty demand but contested the imposition of penalties. The appellant had paid the service tax due and got registered with the service tax authorities after being informed of their tax liability. The Tribunal considered the payment of service tax and the automatic liability for interest as per legal precedents. Regarding penalties, the Tribunal referred to relevant Supreme Court orders and decided to set aside all penalties imposed on the appellant. Consequently, the impugned order was partially modified, and the appeal was allowed with the waiver of penalties under section 80 of the Finance Act, 1994. Conclusion: The Tribunal, consisting of Shri P. Dinesha, Member (Judicial), and Shri M. Ajit Kumar, Member (Technical), pronounced the decision on 22.09.2023, modifying the penalties and allowing the appeal with consequential relief as per law.
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