RAJPAUL HOMES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Heard both sides. Shri Sundareswaran, learned advocate for the appellants states that the impugned period is October, 2005 to June, 2006 and the appellants were not aware of the service tax liability which was imposed with effect from 16 -6 -2005. As soon as they were advised by the department that they were required to pay service tax, they paid the tax along with interest and cess on 4 -8 -2006. The show -cause notice has been subsequently issued on 2 -2 -2007 and penalties have been imposed under Ss. 76, 77 and 78 of the Finance Act, 1994. He pleads that the imposition of penalty is not warranted, therefore the same may be set aside.

(2.) Shri C. Rangaraju, learned SDR appearing for the department supports the impugned order.

(3.) Taking into account of the fact that the appellants have not suppressed the value of the taxable service and have promptly paid the tax and the interest thereon, after receiving necessary advice in that regard from the department, I am of the opinion that the penalty under Sec. 78 is not justified. As such, the appeal is partly allowed by setting aside the penalty imposed under Sec. 78 of the Finance Act, 1994.