COMMISSIONER OF CENTRAL EXCISE Vs. LIC OF INDIA

JUDGEMENT

(1.) THIS appeal filed by Revenue is against the waiver of penalty under section 76, 77 & 78 of the Finance Act, 1994 by the lower appellate authority. The facts of the case are that the respondents are the service provider under the category of Life Insurance and auxiliary services. During the course of audit, it was pointed out that the respondent has not paid the differential service tax for the period 08/02 to Jan., 2004 on commission paid after 16 -8 -2002 to their agents for renewal of insurance policies issued prior to 16 -8 -2002. The respondent paid the service tax on the renewal of such insurance policy in March, 2004 and interest in September, 2004. Later on a show cause notice was issued in 2007 imposing a penalty under section 76, 77 & 78 of the Finance Act. The adjudicating authority imposed the penalty, but the lower appellate authority dropped the penalty against the respondents. Against the said order the Revenue is in appeal.

(2.) HEARD .

(3.) CONSIDERED the submissions made by both the sides. In this case the respondent has sought the clarification from the CBEC, whether they are liable to pay service tax on the commission paid to their agents on policy renewal of policies which were issued prior to 16 -8 -2002 or not. This fact is not disputed by both the sides. The Board has clarified to the respondents at their Mumbai Head Office. Thereafter they paid the service tax after obtaining the clearance from the Mumbai Head Office. In these circumstances, respondents were under bona fide belief that whether the service tax is leviable or not on the respondents. Further in the appellants own case of Jaipur Unit, this Tribunal taken into consideration that the respondents have not paid the service tax in time on account of confusion whether they are liable to pay service tax or not on such commission and the benefit of Section 80 of the Finance Act 1994 was given to the respondents and penalties were dropped. In this case also lower appellate authority considered the submissions of the respondent that they were under bona fide belief that whether they are liable to pay service tax or not has rightly given the benefit under Section 80 of the Finance Act, 1994 by waiving the penalties and the same is the correct view. Accordingly, I do not find any reason to interfere with the impugned order, same is upheld. Appeals filed by the revenue are rejected.