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2014 (10) TMI 483 - HC - Service TaxWaiver of penalty u/s 80 - levy of penalty u/s 76 and 77 and 78 - bonafide belief - Business Auxiliary service - House keeping service - Service not taxable therefore, registration surrendered - Later tax imposed under Business Auxiliary service - Held that:- assessee has clearly stated that they had originally got a registration certificate for house keeping and realizing that the said service is not taxable, they have surrendered the same. It may be emphasized here that the assessee had, in fact, paid duty even when there was no requirement under law and has not even chosen to claim refund till date. Even in respect of the present demand, on receipt of notice from the department about the liability of service tax in respect of back office work, they have paid the service tax and interest even before adjudication. This only goes to show that the assessee had no intention to evade payment of tax and non payment was due to lack of knowledge and awareness. One another factor which enures to the benefit of the assessee is that there is no finding in the given case as to how the original authority has imposed penalty under Section 78 of the Act. The Original Authority should have applied his mind as to how penalty is leviable under Section 78 of the Act and there should have been some reasons given thereunder, which we find are absent in the original order. order of the Tribunal confirming the deletion of penalty imposed under Section 78 of the Finance Act, 1994 is justified and warrants no interference. Assessee has stated that they were under the impression that the service rendered by them will not be exigible to service tax. On an earlier occasion, the assessee registered and paid service tax on a non taxable service and they did not even seek for refund of the amount. The bona fide confusion in the mind of the assessee as to which service is taxable or non-taxable is apparent and that justifies the plea of failure to pay service tax. This reasoning pari passu applies to non registration of said service rendered by them. Therefore, the demand of penalty under Sections 76 and Section 77 of the Finance Act, 1994 is not tenable - Decided against Revenue.
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