TMI Blog2009 (9) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee could have entertained bonafide belief that when it was supplying the equipment to the telecom department, the services rendered by it were not eligible to service tax. Uphold the order to the extent confirmation of demand of service tax liability and the interest, but set aside the penalty, thus the appeal is partly allowed. - ST/435 OF 2007 - 1167 OF 2009 - Dated:- 25-9-2009 - M.V. RAVINDRAN, JUDICIAL MEMBER Varadarajan for the Appellant. Ms. Sudha Koka for the Respondent. ORDER 1. This appeal is directed against OIA No. 55/2007, dated 24-9-2007. The relevant facts that arise for consideration are as follows :— On investigation of the appellant's records by the department, it was found that they had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is his submission that provisions of section 73(3) of the Finance Act, 1994 would apply in this case. He would rely upon the decision of the Division Bench of this Tribunal in the case of Tidewater Shipping (P.) Ltd. v. CST [2008] 16 STT 414 (Bang. - CESTAT). He would submit that the lower authorities should have exercised the provisions as contained under section 80 of the Finance Act, 1994 and should have not imposed any penalties on the appellant. He requested for setting aside the penalties. 4. Learned JDR on the other hand would argue that escapement of service tax liability was noticed by the officers when they verified the records and documents of the appellant for the period July, 2003 to September, 2004. It is his submission tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any service tax. I find that learned Commissioner (Appeals) while coming to the conclusion that provisions of section 80 cannot be considered in this case has given a finding that the appellant has not proved his bona fide but has challenged the demand and its confirmation on the ground of limitation in spite of suppression of material facts at the appeal stage also. I find this is incorrect proposition of the law. The assessee, can be under the bona fide belief. Bona fide belief has to be considered in its right perspective. I am of the opinion that the appellants could have entertained bona fide belief that when they are supplying the equipment to the telecom department, the services rendered by them i.e. commissioning erection and insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority, then no penalty proceedings can be taken against them. In other words, all the proceedings against the appellants will be deemed to have been concluded. In view of the above position, we are of the view that the impugned revisionary orders, enhancing the penalties and imposing the penalties under section 78, are not in order. Further, the impugned order in Sl. No. 4 is also very harsh especially when the appellants had paid the entire amount of service tax and interest even before the issue of show-cause notice. In such circumstances we allow the appeals with consequential relief, if any. The impugned orders are set aside." (p. 417) 6. I find that the above ratio clearly covers the issue in favour of the appellants as regards the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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