K.K.Agarwal, - (1.)THE appellants in this case are not contesting the service tax payable on the service of Mandap keeper provided by them but are seeking relief in penalties on the ground that they are registered educational trust engaged in educational activities. In their school building they have a small hall namely "Dnyana Mandir Sabhagrah" principally intended for recreational activities of student. On holidays the said hall is made available mainly to members and their relatives for marriage and other social functions, for which they collect small service charges and building donation. This income is minor and supplement the income of the mandal. THEy were never aware that such activity was liable to service tax and on receipt of communication from the department they immediately took registration and paid service tax. In such circumstances they request that penalty should not be imposed.
(2.)I have considered the submissions made by the appellants. I find that though ignorance of law is no excuse, still there is a ground for reducing penalty in view of the fact that the appellants are educational trust and have no intention to evade service tax. I accordingly reduce the penalty of Rs. 95,000/- imposed under Section 76 of the Finance Act, 1994 to Rs. 25,000/- only. I do not interfere with the other penalty of Rs. 500/- under Section 75A and Rs. 1,000/- under Section 77 of the Finance Act, 1994. Appeal is partly allowed as per above terms.
(Dictated in Court)