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2018 (10) TMI 558 - AT - Service TaxPenalties on Local Authorities - Delay in payment of service tax - Renting of immovable Property Services - Case of appellant is that there was no levy of service tax at that time and when the levy of service tax was introduced, it was difficult for the municipality to immediately intimate the tenants to make necessary alterations to collect service tax - it was also argued that the issue is interpretational. Held that:- Appellant, being a municipality, has to take up a lot of formalities before giving the premises for lease as well as for collecting rents. The premises were already leased out for three to five years without incorporating the levy of service tax. It is understandable that such a local self-body would find it very much difficult to collect the service tax from the tenants without proper orders from higher authorities. They have written letters to the Principal Commissioner, etc., to obtain sanction for collection of service tax as well as for remitting the service tax. Thus, the delay in payment of service tax occurred due to such reasons. It is convincing that the appellants have put forward reasonable cause for failure to discharge service tax - this is a fit case to invoke section 80 - Penalty set aside - The impugned Order is therefore modified to the limited extent of setting aside the penalties imposed without disturbing the demand or interest thereon. Appeal allowed in part.
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