2007 (1) TMI 658 - AT - Service Tax

Summary

The Appellate Tribunal (CESTAT Bangalore) addressed an appeal against OIA No. 99/06 concerning non-payment of service tax from 2000 to 2005 by a proprietary concern. The appellant, unaware of Service Tax laws, paid the tax liability of Rs. 4.75 lakhs along with interest on 8-2-05, prior to the issuance of the show cause notice dated 29-9-05. The appellant's counsel relied on precedents-Rashtriya Ispat Nigam Ltd. v. CCE, CCE, Mangalore v. Shree Krishna Pipe Industries, Deprocon Engineering Pvt. Ltd. v. CCE, and Kitex Ltd. v. CCE-holding that "when duty is paid before the issue of show cause notice, no interest and penalty are leviable." The Department contended that penalty was justified due to evasion and non-registration under the Finance Act, invoking the extended period.The Tribunal noted the appellant's voluntary payment of duty and interest before any show cause notice and recognized the appellant's plea of ignorance. Applying consistent precedent, the Tribunal held that penalty is not leviable under these circumstances and accordingly set aside the penalty, allowing the appeal.