COMMISSIONER OF SERVICE TAX, BANGALORE Vs. VINAYAKA TRAVELS

JUDGEMENT

(1.) THIS is an appeal by the revenue challenging the order passed by the Tribunal [2009 (13) S.T.R. 31 (Tri. - Bang.)], which has set aside the order of the Revisional Authority imposing a penalty for nonpayment of Service Tax within the time stipulated.

(2.) THE material on record discloses that the assessee was carrying on the business of providing taxi services. The partnership business was constituted on 1 -4 -2002. The case of the assessee was that he was not clear about the application of the provisions of service tax as he was of the view that the "rent a cab scheme" operator should own a minimum 50 vehicles to obtain a licence and to carry on the business. Therefore, he did not register and did not pay the tax. But once the departmental officers informed him that any person owning or operating even with one vehicle would have to pay the service tax, they registered themselves during March, 2003 and obtained a registration on 26 -3 -2003. Thereafter, on 3 -8 -2005, they paid Rs. 72,000/ -, towards the service tax payable. Later, they were informed by the authorities that they should pay interest. Promptly they have deposited a sum of Rs. 32,513/ - on 5 -8 -2005, the interest payable on the service tax. It is thereafter, a notice was issued demanding the penalty. Therefore, they contended that once they have registered themselves under the Act and were promptly paying the tax due and they also paid the tax on being informed, there is no willful default on payment of such amount and hence, they are not liable to pay the penalty and requested for waiver of the penalty imposed. The Original Authority being satisfied with the explanation offered by them, confirmed the demand of Service Tax of Rs. 72,000/ - and demand of Interest of Rs. 32,513/ - and by invoking Section 80 of the Finance Act, 1994 declined to impose any penalty under Sections 76, 77 or 78 of the Finance Act, 1994.

(3.) FROM the aforesaid facts, it is clear, that the assessee came to be constituted in April 2002 as a partnership firm. Admittedly, they were operating one taxi. The assessee was under the impression that only those persons who own 50 taxis and carry on business are liable to pay service tax. Accordingly, he did not seek for registration nor paid any amount towards tax. But once the authorities brought it to their notice, that the Act is applicable even to the person who owns one taxi, promptly they registered under the Act and from that day onwards, they were paying the service tax. Because of the delay in payment of service tax, they are liable to pay interest. They promptly paid the interest also. It is after payment of service tax and interest, a demand was made for payment of penalty. Therefore, in the facts of the case, it cannot be said that they intended to evade duty and there was any mala fide motive or intention in not paying the tax within the time prescribed. Therefore, the authorities in exercise of their discretion under Section 80 of the Act, which is conferred on them, held that the cause shown is a reasonable cause and waived the penalty, which is purely a question of fact. No substantial question of law arises for consideration in this appeal. In these circumstances, we do not see any merit in this appeal.