2010 (6) TMI 431 - AT - Service Tax

Penalty - Waiver under section 80 of the Finance Act 1994 - late payment of service tax and late registration was due to the fact that Notification No. 34/04-ST dated 3-12-2004 granting exemption from payment of service tax in certain situations (the assessees do not dispute that they are not entitled to the benefit under the notification) came into force only from 3-12-2004 while the period of demand is April 2005 to July 2006 - revenue s contention is that the penalty could have been reduced but not entirely set aside - absence of any challenge to the acceptance of the lower appellate authority of the plea of the assessees that reasonable cause existed for non-payment of tax within time - no merit in the revenue s submissions Appeal dismissed

Summary

The Commissioner (Appeals) set aside the penalty by extending protection under section 80 of the Finance Act, 1994. The late payment of service tax and late registration was attributed to a notification granting exemption from service tax. The revenue did not challenge the finding that the assessees had reasonable grounds for non-imposition of penalty. The appeal was dismissed, upholding the decision to set aside the penalty.