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Sri Vinayaga Constructions v/s Commissioner of Central Excise & Service Tax, Coimbatore

    Appeal No.S/200 of 2008

    Decided On, 18 December 2009

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai


    Shri J.Shankar Raman, Advocate. Shri T.H.Rao, SDR.

Judgment Text

The assessees do not dispute the demand of service tax confirmed against them on the ground that they were rendering Commercial Construction Services during the period 1.1.05 to 30.9.06. Service tax liability was discharged on 30.11.06, along with interest. The only challenge is to the imposition of penalties under the provisions of Section 76, 77 & 78 of the Finance Act, 1994 on the ground that tax liability was introduced in September-04 and they were not aware of their liability until it was pointed out by the authorities.

2. I have heard both sides. The department has relied upon the statement dt. 7.12.06 of Shri Ganeshamoorthy, proprietor of the assessees that CENVAT credit on the inputs/capital goods used for providing the service was not availed nor was the exemption under Notification No.12/2003-ST dt. 20.6.03 availed to hold that there was knowledge on the part of the assessees of its liability to service tax. However, as rightly contended by ld. counsel for the appellants, since the statement was recorded even after the payment of service tax, a week prior to the recording of the statement, it cannot be inferred that assessees had knowledge of the liability to pay tax and yet neither registered itself with the authorities nor paid tax.

I, therefore, hold that this is a fit case for setting aside the penalties as I accept that the assessees cannot be said to be guilty of any suppression so as to apply

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the extended period for the purpose of imposition of penalty. 3) The penalties imposed upon the appellants are set aside and the appeal is allowed.