The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dropped the penalty proceedings since the service tax was not paid by the assessee due to the illness of the mother of one of the partners.
The appellant is registered as a service provider under the category of ‘Architect Services’. During the relevant period, the assessee failed to pay service tax admitted in their return. The department initiated penalty proceedings against the assessee.
Before the Tribunal, the appellant submitted that there was a delay in payment of service tax on account of the fact that the mother of one of the partner was suffering from heart problems and as such, on account of the expenses being spent by them towards the treatment of their mother, they could not pay the service tax in time. They further submitted that in view of the reasonable cause shown by the appellant, the penalty should be waived by invoking Section 80 of the Finance Act, 1994.
After hearing both the sides, the Tribunal noted that there was delay in payment of service tax which was on account of the reasonable cause as the mother of one of the partner was suffering from heart problem.
Quashing the penalty proceedings, the Tribunal held that “Further, I find that this Tribunal in the case of Raj Kumar vs. CCE cited supra has accepted the fact that if the service tax is not paid in time due to the illness of the father of the assessee, which is a reasonable cause and by invoking Section 80 of the Finance Act, penalty imposed was set aside. Similarly, other decisions relied upon by the appellant cited supra have invoked Section 80 for dropping the penalty if the reasons given are reasonable. In view of the Division Bench decision of the Tribunal in the case of Raj Kumar Ora cited supra, I am of the considered view that appellants are not liable to pay penalty and I invoke the provisions of Section 80 of the Finance Act to waive the penalty. Consequently, I set aside the penalty by allowing the appeal of the appellant.”Subscribe Taxscan AdFree to view the Judgment