Penalty on assessee having limited operations to be waived off if he had co-operated in proceedings with department

Where an assessee having limited operations had co-operated in proceedings and paid service tax alongwith interest, penalty was liable to be waived off under section 80

In the instant case assessee neither paid service tax nor filed the return in respect of Rent-a-Cab services provided by him. After show-cause notice was issued, he paid service tax alongwith interest, but sought waiver of penalties imposed on him under sections 76 & 77. He sought waiver on the ground that he was a small businessman, he had not collected service tax from service recipients and was passing through financial difficulties.

The Tribunal partly waived off penalty with following observations:-

Taking note of size of operations of assessee and fact that he had co-operated in proceedings and paid service tax alongwith interest, it was appropriate that penalties under section 76, which were almost equal to service tax liability, were required to be waived off by invoking provisions of Section 80. However, penalty imposed under section 77 was to be sustained. - Royal Travels v. Commissioner of Central Excise [2013] 35 taxmann.com 19 (Ahmedabad - CESTAT)