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2015 (1) TMI 289 - CESTAT BANGALORERenting of immovable property - selling of space/advertisement by the appellant-Municipality - Penalty u/s 76, 77 & 78 - Held that:- demand of service tax is for the period from May 2006 to March 2011 on the services of renting of immovable property and selling of space/advertisement by the appellant-Municipality. The learned counsel does not dispute the liability but submits that the appellant being a Municipality was under a bona fide belief that they were not liable to pay and subsequently when the issue was taken up by the department, they were waiting for exemption to be granted by Central Government. He submits that the appellant is not disputing service tax liability which has already been recovered with interest. The only request is that the penalties imposed under Section 76, 77 and 78 of Finance Act, 1994 should be set aside. Having regard to the fact that Government of Andhra Pradesh was trying to get exemption and appellant is a Municipality, we consider that payment of service tax with interest would meet the ends of justice and there is no need for imposition of penalties. Further, we also consider that the appellant has known reasonable cause for non-payment of service tax and therefore, this is a fit case of provision of Section 80 of the Finance Act, 1994. - demand for service tax and interest is upheld - However, penalty is set aside - Decided partly in favour of assessee.
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