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2016 (12) TMI 231 - AT - Service TaxLevy of tax - fees paid under Club or Association Service - imposition of penalty u/s 76 and 77 of the act - Held that: - It is not disputed that till introduction of negative list from 1.7.2012, there was no clarity on the nature and taxability of the service provided by the appellant. In fact for the earlier period, it was held that services availed were not in the nature of 'Club or Association Service' but were only 'Technical Inspection and Certification Services'. No doubt, OIA dt. 12.12.2011 upholding such a view of the original authority was not appealed by the department on monetary grounds as per litigation policy. Nonetheless, the fact remains that the matter was not free from doubt and disputed by the appellant on interpretation during the impugned period. It is also to be noted that appellants are a Public Sector Undertaking and that they have accepted their tax liability after 1.7.2012, after introduction of negative list and as of date, the tax liability after 1.7.2012 has been discharged by them with interest, albeit, belatedly. In the circumstances, I am of the considered opinion that the imposition of penalty under Section 76 of the Finance Act, 1994 is not called for and is hereby set aside. Levy of penalty for non filing of return - Their plea of bonafide belief of not requiring to apply for registration and non-filing of returns as no service tax was payable by them, merits consideration. For these reasons, I find that there is sufficient ground for setting aside penalties under Section 77 ibid also, which I hereby do. Tax liability and interest upheld - penalty set aside - appeal disposed off - decided partly in favor of appellant-assessee.
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