If the assessee paid service tax belatedly after being informed by department, whether penalties may be waived on the grounds of lack of knowledge regarding service tax liability? Held, Yes.

Commissioner of C. Ex., Aurangabad     vs. Nagar  Taluka  SSK Ltd. 2014 (35) STR586   (Tri.-   Mumbai)

 

 

 

 

FACTS:

The  respondents   availed  of  Goods  Transport  Agency services on which service tax was to be discharged under reverse charge mechanism which was not known to them. On being  pointed  out, they  demonstrated  their  inability to pay tax but assured to pay tax along with interest  in future  which  was  subsequently   paid.  The Adjudicating Authority,    however,    confirmed    demand    along   with penalties  under  the  Finance Act,  1994 on the  grounds that intentionally  payment was not made. Penalty levied was  dropped  by  the  Commissioner   (Appeals)  against which  the  department  filed  the  appeal  contending  that tax was not paid on time and hence, mandatory  penalty was imposable as per Hon'ble Apex Court's decision. The assessee pleaded lack of knowledge and also requested for  benefit  of  section  80.  Respondent's  case  was  that they paid tax along with interest without availing input tax credit and therefore, requested to set aside penalty levied and allowing input tax credit.

 

HELD:

Agreeing with the contentions of the respondents, benefit of section 80 was granted and penalties were waived.