Issue:- When service tax is paid voluntary and then the department informed that it was not a commercial concern, can penalty be raised by the revenue?
Brief Facts: - The assessee had applied for service tax voluntarily and paid the service tax for the services provided. Department informed the assessee that there was no liability of service tax as the assessee was not a commercial concern. The Comm. (A) found that there was no scope of allegation of suppression of fact or willful mis-statement of facts with the intent to evade duty so the penalty imposed u/s 78 was waived.
Appellant’s Contentions: - The revenue said that the assessee has made breach of law and so penalty u/s 78 was imposed on him. The Comm. (A) without any cogent reason has waived the penalty. The revenue was aggrieved. There was suppression of facts for which penalty was imposed.
Respondent’s Contentions: - The assessee has already paid service tax but for the confusion in the interpretation of law as to whether the assessee shall be a commercial concern and without any breach of law, penalty has been imposed under section 78 of the Finance Act, 1994.
Reasoning of the Judgment: - The commissioner did not find any convincing evidence except that the revenue said it was suppression of facts. The appeal does not convince us to hold that there was intention to evade service tax by the respondent.
Decision: - Appeal dismissed.
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