Whether benefit of section 80 admissible if tax paid before 28.05.2012 ?

PJ/CASE LAW/2014-15/2300

Case:- CHANDRESH SHANTILAL SHAH Vs CCE, VADODARA-II

Citation:- 2014-TIOL-196-CESTAT-AHM

Brief facts:-The undisputed facts being the appellants have discharged the service tax liability and interest thereof on 14th October, 2010 as soon as the show cause notice was issued to them. It is also undisputed that the appellants were discharging the service tax liability but had to discontinue on the direction of the person / company who had taken on rent the premises of all these appellants.

Appellant’s contentions:- Ld. Counsel appearing on behalf of the appellants submits that the issue is regarding discharge of service tax liability for the period from April 2009 to September 2009. It is his submission that while filing the ST-3 returns they had specifically mentioned the judgment of Hon'ble High Court of Delhi as reported in 2009 (14) S.T.R. (Del.) = [2009-TIOL-196-HC-DEL-ST]thathad held the renting of immovable properties is not liable for the service tax. It is his submission that they have discharged the entire service tax liability with interest in 2010 itself and hence the penalties imposed on them should be set aside by invoking the provisions of Section 80 of Finance Act, 1994. He submits that they had not discharged the service tax liability as the person who hasrented property from them i.e. Canon India Pvt. Ltd. had informed that they will not bearservice tax due to the judgment of the Hon'ble High Court of Delhi.

Respondent’s contentions:- Ld. Departmental Authority reiterates the findings of lower authorities.

Reasoning of judgment:- The Tribunal find that the provisions of Section 80(2) of the Finance Act, 1994 which was inserted w.e.f . 28.05.2012 has been interpreted by the lower authorities is being effective from that date and any payment made prior to that date is not eligible to get the benefit. In our view, such interpretation could defeat the purpose of the legislation in as much as the said amendment was brought into Section 80 of the Finance Act, 1994 for the purpose of non imposition of penalties on discharging of services tax on renting of immovable property, which was brought into service tax net by a retrospective amendment and provisions of Section 80(2) of the Finance Act, 1994 specifically refer to this particular service of renting of immovable property. In their considered view, the said amendment of Section 80 of the Finance Act, 1994 could be applicable to the payment made by assessee even prior to 28.05.2012, as the spirit of the law is to not to penalize the assessees, but had defaulted the payment of service tax of renting immovable property, due to ratio of judgment which held field during the relevant period.

Accordingly, in view of the above since appellant is not contesting the service tax liability and interest thereof, the payments being made by them before the adjudication order, they consider this as a fit case to invoke the provisions of Section 80 of the Finance Act, 1994 and set aside the penalties imposed by the lower authorities on the appellant.

Decision:- The appeal disposed off.

Comment:- The gist of the case is thatthe amendment of Section 80 could be applicable to the payment made by assessee even prior to 28.05.2012, as the spirit of the law is to not to penalize the assesses who had defaulted the payment of service tax on renting immovable property, due to ratio of judgment which held field during the relevant period .

Prepared by: Monika Tak

Comments

PJ/CASE LAW/2014-15/2300

Post a Comment

Query