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December 2015

Waiver from penalty u/s. 80 shall be available if levy on service was subject to dispute and retrospective amendments are made to the provisions of law.

By Puloma Dalal
Jayesh Gogri
Mandar Telang, Chartered Accountants
Reading Time 1 mins
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40. 2015 (40) STR 280 (Tri.–Ahmd.) Sethi Tools Pvt. Ltd. vs. CCE. CUS & ST. Vadodara-II.

Waiver from penalty u/s. 80 shall be available if levy on service was subject to dispute and retrospective amendments are made to the provisions of law.

Facts

Section 80(2) of the Finance Act, 1994 prescribed nonlevy of penalty for failure to pay service tax payable on renting of immovable property as on 6th March, 2012 subject to payment of tax and interest within 6 months from enactment of Finance Bill, 2012. The appellant paid service tax belatedly but before introduction of the said section 80(2). Penalty was imposed as section 80(2) was not in existence during the period under consideration. The Appellant relied on the case Camex Reality Pvt. Ltd. vs. CST, Ahmedabad 2014 (36) STR 444 (Tri.-Ahmd), and prayed for waiver of penalty.

Held

Assessee who had already paid taxes before introduction of section 80 (2) of the Finance Act, 1994 cannot be put to a disadvantage vis-à-vis taxpayer making delayed payment on the same service at a later date. In any case, chargeability of such service was in dispute. Therefore, there was a reasonable cause for non-payment of tax which shall get covered u/s. 80 even before introduction of section 80(2) of the Act.

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