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2018 (11) TMI 1471 - AT - Service TaxPenalty u/s 77, 78 and under Rule 7(C) - delayed payment of service tax - appellant approached their customer and requested them to pay service tax but their client did not pay the service tax on the ground that they were exempt being a charitable institution - Held that:- The appellant was constructing student hostel and staff quarters for the Trust only and they had a bona fide belief that they are not liable to pay service tax as they were doing construction work only for the Trust which had exemption vide Notification No.25/2012-ST dated 20.6.2012 - further, when the letters were received from the Department thereafter appellant paid the entire service tax along with interest from her own pocket in spite of the fact that the client of the appellant refused to pay the service tax to her. The imposition of penalty of 15% under Section 78 is not applicable in the present case, because in the present case, the entire service tax along with interest was paid two years before the issue of show-cause notice whereas reduced penalty under Section 78 is applicable if payment is made within 30 days from the date of show-cause notice. Penalties do not sustain - appeal allowed - decided in favor of appellant.
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