Penalty for service tax suppression fails without proof of intent to evade tax and culpable misstatement.

Penalty was held unsustainable where the assessee had already paid the service tax and continued filing returns, and the record showed no material indicating suppression of facts, fraud, or wilful misstatement. In the absence of proof of culpable conduct with intent to evade tax, the penal provision could not be invoked. The penalty was therefore set aside in favour of the assessee.

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Issues: Whether penalty was sustainable in the absence of material showing suppression of facts with intent to evade payment of service tax.

Analysis: The appellant had already paid the tax and had been filing service tax returns, and the record did not disclose any material indicating suppression of facts, fraud, or wilful misstatement. In the absence of such ingredients, the penal provision could not be invoked.

Conclusion: Penalty was not warranted and was set aside in favour of the assessee.

Ratio Decidendi: Penalty under the relevant tax statute is unsustainable unless suppression of facts or similar culpable conduct with intent to evade tax is established on record.

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