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2011 (6) TMI 705 - AT - Service Tax

Issues:
1. Imposition of penalty for non-payment of Service Tax.
2. Applicability of exemption notification for service providers in transmission and distribution of electricity.
3. Stay of recovery of penalty amount during pendency of appeal.

Analysis:
1. The appellant appealed against the penalty imposed for non-payment of Service Tax for maintenance work undertaken for a corporation. The consultant argued that the appellant was unaware of the tax liability initially but paid the due amount promptly upon notification by the department. The Commissioner revised the penalty amount, which was already paid by the appellant, leading to the appeal. The consultant cited precedents to support the argument that revision proceedings cannot commence when an appeal is pending. The Tribunal considered the submissions and noted the waiver of Service Tax for service providers in electricity transmission and distribution under a specific notification. The Tribunal found a prima facie case for stay based on the notification and past decisions, granting a stay against the recovery of the penalty amount during the appeal.

2. The Tribunal referred to the decision in the case of SMP Steel Corporation and the exemption notification waiving Service Tax for service providers in electricity transmission and distribution. Despite the Department's argument against the applicability of the exemption, the Tribunal held that a detailed consideration of this issue would be done later. The Tribunal acknowledged the opportunity for the Department to explain why the notification could not be applied. Citing the decision in another case where an assessee was granted unconditional stay based on the same notification, the Tribunal granted a stay against the recovery of the penalty amount during the appeal proceedings.

3. The Tribunal's decision was influenced by the precedent set by the Tribunal in the case of SMP Steel Corporation, emphasizing that revision proceedings cannot be initiated while an appeal is pending. The Tribunal waived the pre-deposit of the demanded amount and granted a stay against the recovery of the penalty during the pendency of the appeal, considering the application of the exemption notification and the principles established in previous cases. The Tribunal's decision favored the appellant's argument and provided relief by allowing the stay against the penalty recovery, pending the appeal process.

 

 

 

 

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