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PJ/Case Laws/2010-11/1077

Imposition of Penalty

Case: Commissioner of C. Ex., Nagpur v/s Kalamna Market Urben
 
Citation: 2010 (20) STR 205 (Tri. – Mumbai)
 
Issue:- Whether setting aside of penalty due to payment of service tax before the issue of Show cause notice was justified?
 
Brief Facts:- Respondent-assessee was collecting money from the customer as deposit and lending loans to different customers, as well as providing the facilities o issuing banker’s cheque on requisition of the customers. While sanctioning the loans, the respondent was collecting commission for providing such services which fall, under the category of service provided as “Banking and Finance Services” w.e.f. 10.09.04. The respondent did not register themselves with the department and did not pay the service tax. However as soon as it came to the knowledge of the respondent, they immediately obtained the registration and paid the service tax along with the interest but the Adjudicating Authority imposed a penalty under Section 76, 77 and 78 on the respondent.
 
On appeal, the Commissioner (A) dropped the penalties. Aggrieved by the order of the Commissioner (A), Revenue has filed this appeal before the Tribunal.
 
Appellant’s Contention:- Revenue contended that the respondents are a co-operative Society and engaged in the business of accepting deposit and lending money to their customers which falls under the category of Banking and Financial services and the ground  taken by them for not paying service tax due to ignorance of law is not reasonable. The penalty on the respondent is liable to be confirmed under Section 76, 77 and 78. They relied upon the decision given in Hi-Tech Calibration Centre versus Commissioner of Central Excise, Coimbatore [2006 (2) STR 357 (Tri-Chennai)].
 
Reasoning of the Judgment:- The Tribunal found that the Commissioner has exercised his power under Section 80 of the Finance Act, 1994 and given benefit to the respondent and dropped the penalty. The case law cited by the Revenue is not relevant to this case as in that case the Commissioner (A) did not give the relief to the assessee under Section 80 of the Finance Act. No reasons to interfere with the impugned order.
 
Decision:- Appeal dismissed.
 

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