Suppression and delayed service tax payment justified demand, interest and penalties; pre-notice payment did not bar penalty relief.

Service tax collected but not deposited on the due dates, with interest on delayed payment also remaining unpaid before the show cause notice, justified sustaining the demand, interest and penalties. The finding of suppression of facts with intent to evade tax was upheld on the basis of the delayed and incomplete compliance, and the plea that penalty was barred because tax and interest were paid before notice was rejected. Relief was denied.

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Issues: Whether the demands of service tax, interest and penalties were sustainable in view of the appellants' delay in payment, non-payment of interest, and alleged suppression of facts with intent to evade tax.

Analysis: The appellants had collected service tax but did not deposit it on the due dates, and the payments were made much later, including through cenvat credit, over an extended period. The interest on delayed payment was also not paid before issuance of the show cause notice. On these facts, the finding of suppression and intent to evade was upheld, and the plea that penalty under the statutory provisions was barred because tax and interest had been paid before notice was rejected.

Conclusion: The demand, interest and penalties were sustained and the appellants were not entitled to relief.

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