2006 (12) TMI 49

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..... commercial training or coaching, despite the said services being brought into service tax net 1-7-03. The appellants admitted their service tax liability subsequent to the visit of the officers to their coaching centre and discharged the service tax liability as indicated in the show cause notice partly prior to issue of show cause notice and partly after the issue of show cause notice. The adjudicating authority confirmed the demand and imposed penalty under the provisions of Sections 76, 77 and 78 of the Finance Act, 1994. On an appeal, the learned Commissioner (Appeals) also upheld the order in original for the imposition of penalties under        Finance Act, 1994. Hence these appeals. 3. The learned .....

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..... otification was not extended by the Revenue. Hence the service rendered by the commercial and coaching centres had to discharge the service tax from 1-7-04. To my mind the appellants may have been misguided or mis-informed about the extension of the notification, which granted exemption to commercial training and coaching centres. The bona fide belief of possible extension of notification could not be a ground for imposition of such a heavy penalty under the provisions of Section 76 and 78 of the Finance Act. Further, it is seen from the record that the appellants had in fact recorded all the receipts in their books of account. The Division Bench in the case of CCE, Bangalore v. Impress Ad-Aids & Displays reported in 2006 (3) S.T.R 385 (Tri .....

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..... of the relevant circumstances. We find that the Commissioner (Appeals) has noted that the service tax was a new levy and the assessee did not know about the promulgation of the levy. They had deposited the service tax along with interest and in view of this fact, the Commissioner found the action of the assessee to be bona fide and in that circumstance felt that exorbitant penalty of Rs. 1,03,200/- for a service tax of Rs. 13,731/- was imposable. We have examined the issue and find that the Commissioner was justified in setting aside such an exorbitant penalty and the same is in light of the law laid down by the Tribunal in the case of Smitha Shetty v. CCE supra which examined the rulings of the Tribunal, High Court and Supreme Court judgm .....

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