1. This appeal is filed by the Revenue against the Order of the Commissioner (Appeals).
2. The respondent M/s. Suman Satellite are provider of taxable service of cable operator as defined under Section 65 of the Finance Act, 1994.
The respondents had provided cable service to 105 customers and they were charging Rs. 200/- per month for the service from each of their customers during the period 16.8.02 to 31.3.03. They did not pay service tax and did not file ST-3 return for half year ending 30.9.02 and 31.3.03 under Section 70 of the Finance Act, 1994 and also did not take registration. Accordingly, show cause notice was issued to them for recovery of service tax and imposition of penalty. The adjudicating authority confirmed the differential service tax of Rs. 226/- and imposed penalty of Rs. 500/- under Section 75A, Rs. 1,000/- under Section 77 for not filing the return and penalty at the rate of Rs. 100/- per day for every day's delay for not paying service tax within time under Section 76. The respondents filed appeal before the Commissioner (Appeals) who dropped the penalties imposed on the respondents under Sections 75A, 76 and 77 on the ground that Board has declared Tax Payer Friendly Scheme under F.No. 137/139/2004-CX-4, dated 23.9.04 to be operational up to 30.10.04 in respect of the assessees who had not at all complied with the provisions of service tax.
3. It was pleaded for the Revenue that their appeal against dropping penalty of Rs. 500/- under Section 75A is contrary to law as Section 80 of the Finance Act does not provide for any relaxation in any penalty, under Section 75A. It is accepted fact that the respondents had not taken registration. Therefore, they are liable for penalty under Section 75A of the Finance Act.
4. The respondents submitted that they are filing return reply to the notice and the appeal may be decided on merits after taking into consideration their reply. In their written reply, they stated that penalty under Section 75A is totally unjustified as cable net work services are covered under tax with effect from 16.8.2002 and registration should have been taken within 30 days. They got registration on 16.9.02 as 14th and 15th September, 2002 were holidays being Saturday and Sunday. They have, therefore, not violated the provisions of Section 75A of the Finance Act, 1994.
5. I have considered the appeal of the Revenue. I find that the respondents had taken registration certificate within the time prescribed. Therefore, no penalty is imposable. Accordingly, the appeal of the Revenue is rejected.