2009 (8) TMI 20 - AT - Service Tax

Penalty - It is clear that the assessees were aware of their liability to pay service tax as they had been paying tax for the previous period. No argument has been raised either before the adjudicating authority or the lower appellate authority that penalty should be set aside by extending the protection under Section 80 of the Finance Act 1994. Even at this stage no case has been made out for setting aside the penalty in the absence of any bona fide belief on the part of the assessees that they were not required to pay service tax for the reason that they were very well aware of their liability and had actually discharged liability during the periods prior to the period in dispute. Financial hardship is the only ground raised for belated payment of service tax which is not a ground for holding that assessees are not liable to penalty. Levy of penalty upheld

Summary

The appeal challenges penalties imposed for non-payment of service tax and not filing returns. Assessees were aware of their tax liability, so no case for setting aside penalties. Financial hardship not a valid reason. Appeal rejected.