With regard to imposition of penalty under Section 75A, 76, 77 and 78 of the Act, the appellants argue that non payment of service tax on the Business Auxiliary Service due to the bonafide belief that the taxable event is existing only in the business transaction between IHFCL and the borrowers and the service rendered by them to IHFCL is secondary in nature. They are not aware of the fact that the service of loan processor rendered by them to IHFCL and the service of sanctioning of loan rendered by IHFCL to borrowers are two separate taxable services. As such the appellants have not also raised any bills against IHFCL and the service tax incidence is also not collected from IHFCL.
It is also seen that once the lapse on the part of the appellants is brought to their notice, they have readily paid the service tax along with part payment of interest for belated payment and the same has been appropriated towards the demand and interest confirmed. It is seen that the above said error in understanding the provisions relating to impugned taxable services is a reasonable cause for failure of provisions contained under Section 76, 77 and 78 of the Act.”
There is no evidence adduced to contend that the respondents have deliberately failed to pay service tax. There is no evidence brought on record to contradict the above factual finding recorded by the Commissioner (Appeals).
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. ST/620/2010
Arising out of Order-in-Appeal No.235/2010 Dated: 24.6.2010
Passed by the Commissioner of Central Excise (Appeals), Madurai
Date of Decision: 14.02.2011
COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI
Vs
G V ASSOCIATES
Appellant Rep by: Shri K Balasubramanian, DR
Respondent Rep by: None
