PRIYA HOME STUDY PVT. LTD. Vs. CCE

JUDGEMENT

(1.) AFTER hearing both sides, we find that the service tax of Rs. 34,51,446/ - stands confirmed against the Appellant under the category of 'commercial training and coaching services' for the period from 1.7.2004 to 31.3.2006. In addition a penalty of identical amount stands imposed under Section 78 of the Finance Act, 1994 along with penalties of Rs. 100/ - per day under Section 76 and Rs. 1,000/ - under Section 77 of the Finance Act, 1994. The service tax confirmed and penalty imposed by the Additional Commissioner stands upheld by the Commissioner (Appeals) and hence the present appeal.

(2.) LEARNED Advocate appearing for the Appellant submits that he is not disputing the confirmation of service tax against them, which already stands paid by them along with interest even prior to issue of show cause notice. However, he submits that the challenge in the present appeal is only to imposition of penalty under Sections 76, 77 and 78 of the Finance Act, 1994. He submits that the Appellant is operating from a small place called Jhunjhunu in Rajasthan and they had recently started imparting education in computer operation etc. The said service was exempted from payment of service tax vide Notification No. Dated 20.6.2003. However, the said exemption withdrawn from 1.7.2003 and the computer education was made taxable to service tax with effect from the said Date. He submits that the Appellant was not aware of the above development as it is situated in a small district where there was no central excise office during the relevant period. They were never advised by anybody to get service registered and started paying service tax for the first time when the officers visited their premises on 6.2.2006. When they came to know about their liability to pay service tax, as a good citizen they immediately agreed to pay service tax right from 1.7.2004 onwards, even they had not collected the same from the students. He further submits that though the show cause notice was issued for the period from 1.7.2004 to 31.3.2006, the demand is partly barred by limitation but the Appellant never choose to contest the same on the said ground and immediately deposit of the service tax alongwith interest. He further submits that payment of service tax is quasi penal nature and the Revenue has not disclosed any reason to show any malafide on the part. In such circumstances, he submits that it is fit the case for invocation of provision under Section 80 of the Finance Act, 1994 and prays for setting aside the penalty imposed upon the Appellant under various sections.