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TMI Blog2022 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of service tax. It is as liable to pay service tax as any other assessee. For failures, it is as liable to penalties as any other assessee. No more, no less. This takes us that the next question as to whether the assessee, in the factual matrix of this case can be said to have proved that it had reasonable cause for failure to pay service tax - On being pointed out, the assessee immediately paid the service tax along with interest. The assessee was also renting out some of its properties for commercial use and collected rent of about ₹ 13 lakhs. This activity was liable to service tax but the assessee had not paid service tax. On being pointed out, the assessee has immediately paid the service tax along with interest. Given this factual matrix, we are inclined to conclude that these were mere careless mistakes by the assessee without any intention to evade service tax. They fall within the scope of reasonable cause for failure the cause being ignorance or lack of due care. Therefore, the case falls within the mischief of Section 80 of the Finance Act, 1994. It has been rightly invoked by the Commissioner (Appeals) and the penalties have been waived by him correctly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e belief that they were not liable to service tax, hence they had not paid the tax. Considering the above fact, I am to extend the benefit of Section 80 of the Finance Act, 1994 and waive penalties under Section 76, 77 and 78 of the Act. For waiving the penalty I rely on the decision in the case of CCE Indore versus Madhya Pradesh Financial Corporation 2014 (33) S.T.R. 302 (T) wherein the identical issue has been dealt with. Further, it is held in the several cases, that even after there is suppression of fact and extended period is involved, the penalty can be waived. In this connection, I rely on the decision in the case of Raj Kumar Jain versus CCE, Jaipur I 2009 (13) S.T.R. 154 (T) and Sharvin versus CCE, Bhopal 2008 (11) S.T.R. 630 (Tri. Del.) wherein the demand has been confirmed but the penalty under Section 78 has been waived. Further, while deciding the question of law framed before the Hon ble High Court of Madras in the case of Shri Suthan Promoters 2010 (19) S.T.R. 646 (Mad.), it has been found that the court has taken the same view and waived the penalty under Section 78 of the Act, though in this case the demand was confirmed under extended period. 2. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises which it let out for commercial purposes. 6. It was also found that the assessee had collected loan application fees from the applicants along with service tax. To the extent of payment of tax on the application fee collected from the applicants, there is no dispute. However, in some cases, the loan application fee was refunded by the assessee to the applicants but not the amount collected as service tax on such fee. Neither has this amount collected as representing service tax been deposited in the Government exchequer. This amount collected from the applicants as representing service tax by the assessee but which was not paid to the exchequer was found to be irregular. An amount of ₹ 1,93,850/- on this account was immediately paid by the assessee on being pointed out during audit. Therefore, the total service tax under dispute was ₹ 3,54,664/- (₹ 1,93,850/- on account of service tax on loan application fee + ₹ 1,60,814/- on account of renting of immovable property). Both these amounts were confirmed in the impugned order along with interest. However, since the impugned order was passed deciding two orders-in-original and there was overlap of demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o waiver of penalties under Section 76, 77 and 78 upon the assessee invoking Section 80 of the Finance Act, 1994. We find Section 76, 77 and 78 provide for imposition of penalties. However, Section 80, as it stood during the relevant period read as follows :- Penalty not to be imposed in certain cases. 80. Notwithstanding anything contained in the provisions of section 76, or section 77, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. 10. Learned Commissioner (Appeals) has found that the assessee is a Government undertaking and was registered with the service tax department. He also found that when it was pointed out during the audit that it was liable to pay service tax on the renting of immovable property service and also deposit the amount collected as service tax on the loan application fees collected and returned to the applicants without amounts collected as service tax on it, they paid the same along with interest. Both the service tax and the interest have been appropriated by the original authorities in their orders. 11. Learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licants. Neither was this amount deposited in the exchequer. This small amount collected as service tax on sale of loan application fee to the applicants which was not refunded to the applicant along with the refund of application money remained with the assessee. This was detected during audit. On being pointed out, the assessee immediately paid the service tax along with interest. The assessee was also renting out some of its properties for commercial use and collected rent of about ₹ 13 lakhs. This activity was liable to service tax but the assessee had not paid service tax. On being pointed out, the assessee has immediately paid the service tax along with interest. Given this factual matrix, we are inclined to conclude that these were mere careless mistakes by the assessee without any intention to evade service tax. They fall within the scope of reasonable cause for failure‖ the cause being ignorance or lack of due care. Therefore, the case falls within the mischief of Section 80 of the Finance Act, 1994. It has been rightly invoked by the Commissioner (Appeals) and the penalties have been waived by him correctly. Therefore, Revenue s appeal in the matter also de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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