BOOTLEGGERS ISLAND Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) THE challenge in the present appeal is only to the imposition of penalty of Rs. 2,58,675 under Section 76 and Rs. 1,000 under Section 77 of Chapter V of the Finance Act, 1994, which penalties have been imposed for non -payment of service tax by the due date and for not filing returns.

(2.) I have heard both sides. It is clear that the assessees were aware of their liability to pay service tax as they had been paying tax for the previous period. No argument has been raised either before the adjudicating authority or the lower appellate authority that penalty should be set aside by extending the protection under Section 80 of the Finance Act, 1994. Even at this stage, no case has been made out for setting aside the penalty in the absence of any bona fide belief on the part of the assessees that they were not required to pay service tax for the reason that they were very well aware of their liability and had actually discharged liability during the periods prior to the period in dispute. Financial hardship is the only ground raised for belated payment of service tax which is not a ground for holding that assessees are not liable to penalty. The appeal is therefore devoid of merits. I, accordingly, uphold the impugned order and reject the appeal.