COMMISSIONER OF SERVICE TAX, SERVICE TAX COMMISSIONERATE, NO. 16, S.P. COMPLEX, LALBAGH ROAD, BANGALORE - 5600217 Vs. M/S. SCORPION SECURITY LIMITED, PALACE GROUND, VASANTH NAGAR, BANGALORE - 560052

JUDGEMENT

(1.) THE Revenue has preferred this appeal challenging the order passed by the Tribunal which has set aside the levy of penalty for non -payment of service tax within the time stipulated. The material on record discloses that the assessee paid a sum of Rs. 37,00,000/ - as service tax before the issue of show cause notice and he paid a sum of Rs. 3,00,000/ - thereafter. For the delay in payment of Rs. 3,00,000/ - he has paid penalty Rs. 10,000/ -. Not being satisfied with the same, penalty was levied for delay in making payment of Rs. 45,00,000/ - besides Rs. 200/ - per month was levied for the delay in payment of service tax. The assessee contended as the very liability to pay service tax for security service was being agitated in the Madras High Court, therefore he has bonafidely believed that is only after the judgment in the Madras High Court the liability to pay service tax arises. However when the Department pointed out the liability to pay lax even before the issue of show cause notice he has paid the said amount and therefore he had reasonable excuse for not paying the service tax on the day it became due. Explaining the said situation he levied a penalty which is unsustainable. From the aforesaid material it is clear that the liability to pay service tax was being agitated before the High Court of Madras though the assessee was not a party in the said proceedings he honestly believed that the decision so rendered in the said decision will also be applicable to his case and therefore he has not paid the service tax and when the Department has pointed out the liability to pay even before the issue of show cause notice he has paid 36,00,000/ -. There is a delay of two days and he imposed penalty of Rs. 10,000/ -. In those circumstances, the Tribunal was justified in holding there was a reasonable cause for not paying the service tax on different dates and therefore the liability imposed is illegal. We do not see any justification to interfere with the well considered order of the Tribunal. Therefore, the appeal is dismissed. The substantial question of law is answered in favor of the assessee and against the revenue.