Appellant wins appeal by paying service tax promptly, avoiding show-cause notice.

The appellant was found liable to pay service tax on commission paid to foreign agents under Section 66(a) of the Finance Act, 1994. However, as the appellant promptly paid the service tax before the issuance of a show-cause notice, in accordance with Section 73(3) of the Finance Act, 1994, the Tribunal ruled that the notice should not have been issued. Consequently, the appeal was allowed, and the appellant was granted relief, as the timely payment aligned with statutory provisions, leading to the Tribunal's decision in favor of the appellant.

---

---

Issues involved: Liability to pay service tax on commission paid to foreign agents under Section 66(a) of the Finance Act, 1994; applicability of Section 73(3) of the Finance Act, 1994; imposition of penalties under Section 76 & 77 of the Finance Act, 1994.

Analysis:

1. Liability to pay service tax on commission paid to foreign agents under Section 66(a) of the Finance Act, 1994:
The appellant, engaged in the manufacture and clearance of excisable goods, paid commission to foreign agents during a specific period. The issue arose when the Central Excise officer notified the appellant of their liability to pay service tax on this commission. The appellant calculated and paid the amount with interest before the issuance of a show-cause notice. The Tribunal noted that as per Section 66(a) of the Finance Act, 1994, the appellant was required to pay service tax as a receiver of service from foreign agents without offices in India.

2. Applicability of Section 73(3) of the Finance Act, 1994:
The appellant's counsel argued that the case fell within the purview of Section 73(3) of the Finance Act, 1994. According to this provision, if an assessee pays the entire service tax amount with interest either determined by themselves or by the Central Excise Department before the issuance of a show-cause notice, no such notice should be issued. In this case, the appellant promptly paid the service tax upon being informed of the liability, and the entire amount was settled within the stipulated period. The Tribunal agreed that since the appellant had correctly paid the amount before the show-cause notice and there was no dispute regarding the payment, the notice should not have been issued.

3. Imposition of penalties under Section 76 & 77 of the Finance Act, 1994:
The Tribunal considered the circumstances where the appellant had paid the service tax with interest before the show-cause notice was issued. Given that the payment was made in accordance with the provisions of Section 73(3) of the Finance Act, 1994, the Tribunal concluded that the show-cause notice should not have been initiated. Consequently, the appeal was allowed, and any consequential relief was granted to the appellant. The Tribunal's decision was based on the appellant's timely payment of the service tax amount, which aligned with the statutory provisions, thereby leading to the allowance of the appeal and relief to the appellant.

---