Dinesh Chandra Dubey Vs Commissioner of Central Goods (CESTAT Delhi)
CESTAT Delhi held that penalty for non-payment of service tax not leviable when the assessee has proved reasonable cause for their bona fide belief of non-payment.
Facts- The appellants were receiving commission from M/s. Adarsh Credit Co-operative Society Ltd. for providing various services including that of ‘Consultants’. A specific intelligence was gathered by the Officers of DGGI, Jaipur Zonal Unit about appellants to have received commission from M/s. ACCSL in lieu of providing “Business Auxiliary Services” being provided to said M/s. ACCSL. But the service tax was not being paid by the appellants on the amount of the said commission received.
Accordingly, the appellants herein were served with the respective show cause notices proposing the recovery of respective amount of service tax along with interest and the appropriate penalties. The said proposal has been confirmed by both the adjudicating authorities except for some benefit. Being aggrieved the appellants are before this Tribunal.
Conclusion- Appellants apparently have mentioned themselves to be under the bona fide belief of still not being liable under service tax. Based on the said belief only they neither had applied the registration nor had ever filed the service tax return. The reason for such bona fide belief stands corroborated from the fact that the service tax was neither collected by them from M/s. ACCSL nor accordingly, was paid by the appellant.
Held that assessee’s bona fide belief cannot be doubted and where the assessee proves reasonable cause for such belief and for the failure to not to discharge its liability, the penalty shall not be imposed upon such assessee. This Tribunal had set aside the penalty in that case by invoking Section 80 of Finance Act, 1994.
FULL TEXT OF THE CESTAT DELHI ORDER
Present order disposes of five appeals. The issue involved in the appeal being common and all the appellants being the service providers, on commission basis, of M/s. Adarsh Credit Cooperative Society Ltd. (hereinafter called as M/s. ACCSL). The details of appeals are as follows:
