Service Recipient vide Letter Intimidated Service Tax Not Required: CESTAT Held No Mala Fide Intention, Allowed Appeal [Read Order]
CESTSAT did not find evidence to prove mala fide intention. The tribunal deleted the penalties imposed accordingly.
![Service Recipient vide Letter Intimidated Service Tax Not Required: CESTAT Held No Mala Fide Intention, Allowed Appeal [Read Order]](https://images.taxscan.in/h-upload/2026/02/20/2126508-cestatjpg.webp "Service Recipient vide Letter Intimidated Service Tax Not Required: CESTAT Held No Mala Fide Intention, Allowed Appeal [Read Order]")
The Customs, Excise & Service TaxAppellate Tribunal (CESTAT), Kolkata Bench, allowed an appeal since there is no mala fide intention of avoiding service tax. The letter sent to the appellant by the service recipient intimates that service tax would not be required. The facts of the case are that the appellant is registered under the category of ‘management, maintenance or...
The Customs, Excise & Service TaxAppellate Tribunal (CESTAT), Kolkata Bench, allowed an appeal since there is no mala fide intention of avoiding service tax. The letter sent to the appellant by the service recipient intimates that service tax would not be required.
The facts of the case are that the appellant is registered under the category of ‘management, maintenance or repair service’ and pays Service Tax accordingly. During the audit, it was found that the appellant had not paid service tax on the service of installation of street lights, traffic lights, flood lights or other electrical and electronic equipment, appliances or devices or providing electronic connections by them, etc.
These services fall under the taxable category of ‘erection, commissioning and installation service’. However, in a letter dated 02.07.2010 the service recipient had intimidated the appellant that the said services do not qualify as taxable services in accordance with CBEC Circular No. 123/5/2010-TRU dated 24.05.2010.
Therefore, the appellant did not discharge service tax on the said activity but for other activities under ‘management, maintenance or repair service’ he was paying service tax.
A show cause notice was issued to the appellant demanding service tax which the appellant paid with interest. The appellant appears before CESTAT to waive off the penalty imposed on the ground that there was no mala fide intention to evade tax on the said activity.
The tribunal considered the letter by the service recipient and pointed out that the appellant had paid the appropriate service tax with interest when the demand was raised against him. CESTAT ruled that no mala fide intention can be inferred from the set of facts and dropped the various penalties imposed on the appellant for not paying Service Tax.
The bench, comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member), allowed the appeal with consequential relief.
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