M. MADHURI Vs. COMMISSIONER OF CENTRAL EXCISE, GUNTUR

JUDGEMENT

(1.) THE appellant is challenging the correctness of Service Tax computation in terms of O -I -A No. 07/2004 -(T) S.T., dated 13 -4 -2004. The assessee was carrying on the business of Kalyana Mantapam, which has been brought under Service Tax. The quantum of Service Tax has been arrived even on the collection of Godown charges by the assessee. They had filed year -wise details of statement of income wherein they have shown that the rent from letting out of Marriage Hall & Function Hall for the financial year 1997 -98 is Rs. 40,000/ -; for the financial year 1998 -99 is Rs. 40,000/ -; for the financial year 1999 -2000 is Rs. 43,000/ -. They contend that the total amount of income by letting out for Marriage Hall & Function Hall has been only Rs. 1,23,000/ - and the Service Tax leviable is Rs. 8,775/ - and not an amount of Rs. 25,029/ - and penalty of like sum as has held by the authorities below. It is contended that penalty is not leviable as the appellants are under bona fide belief about they being exempted from the Service Tax. In this regard, the Tribunal ruling in the case of CCE, Bangalore -III v. Impress Ad -Adis & Displays - 2004 (173) E.L.T. 137 (Tri. - Bang.) is relied which has scaled down the penalty on assessee establishing their bona fides. The Tribunal has also ruled that Service Tax being a new levy and the assessee being unaware about promulgation of the levy, therefore, in those facts and circumstances, exorbitant levy of penalty is not justified. The Tribunal has ruled in the light of the Apex Court judgment rendered in the case of Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. (J 159) (S.C.) and that of the Tribunal ruling rendered in the case of Smitha Shetty v. Commissioner - 2003 (156) E.L.T. 84 (Tribunal).

(2.) I have heard both sides in the matter and I have perused the records. The appellant has produced the detailed income statement for each year duly notorised and supported by an affidavit of the appellant who is a proprietrix. There is no reason to disbelieve this financial statement even on oath and by the supporting affidavit and documents. Therefore, the Service Tax has to be levied only on income earned from Marriage Hall and Function Hall and not on the income earned on the Godown. The income, which works out on letting out of Marriage Hall and Function Hall, works out to Rs. 1,23,000/ - and the Service Tax thereon works out to Rs. 8,775/ -. Hence, the Service Tax confirmed to an extent of Rs. 25,029/ - is reduced to Rs. 8,775/ - and penalty is reduced to Rs. 5,000/ - in the light of the cited judgments. The appeal is disposed of by modifying the impugned order.