Whether late fees imposed by the Service Tax on non-filing or ST-3 Returns having no tax liability.

[samiuddin ansari]

Sir,

With due respect, I may kindly be informed as to whether late fees imposed by the Service Tax Department on being the filing of delayed ST-3 Returns in which there is no tax liability or nil tax payable, but have gross taxable value as shown in ST-3 Returns. As my friends firm are receiving notices from the Service Tax Department for payment of late fees for delayed returns.

Any reference of Circular or clarification or also case laws in this regard may be conveyed, please

Thanks with regards,

S.N.Ansari.

[YASHAVANTH RM]

Dear Mr. Ansari,

Being an Assessee of Direct tax or Indirect tax, we are supposed to file returns to the department to declare the followings:

1) what is our T.O. or Income

2) How much we are exempted / full or partial

3) How much tax we paid/ whether any credit or exemption

to prove the above all subjects, all assessee are mandatory to file the returns. Please read Rule 6 of Service tax for full details and penalty clause.

Yash-9731300563

[KASTURI SETHI]

Dear Querist,. If Service Tax liability is NIL, under Rule 7 C (1) Proviso, Service Tax Rules, 1994 the A.C./DC, is empowered to waive off penalty, if convinced.

[Ganeshan Kalyani]

In the case of 'Graintoch Industries Ltd., Vs Commissioner of C.Ex.,- 2014 (8) TMI 965 - CESTAT MUMBAI The Hon'ble CESTAT, Mumbai has held that there was genuine reason for the appellant to not file the return and hence the case ruled in favour of appellant.

In your case if there is genuine reason not to file the return, then as advised by Sri Kasturi Sir, the officer has authority to waive the penalty proposed. Thanks.

[KASTURI SETHI]

Well explained with case law by Sh.Ganeshan Kalyani, an expert. In such situation normally the department exonerate penalty.

[Himansu Sekhar]

Kindly see the trade notice below

TRADE NOTICE NO. 11/2007 DATED 26.04.2007

[KASTURI SETHI]

Yes. Circular is there in favour of assessee but Rules always prevail over circulars. In such a situation SCN is issued and then adjudicated depending upon facts and circumstances of each.Discretionary power is with Central Excise Officer. Non-filing/late filing of ST-3 returns are monitored by the Directorate of ACES, Chennai. After adjudication of the case, the jurisdictional Range Officer has to send compliance to the ACES, Chennai.

[YAGAY and SUN]

We are sharing with you a relevant judgment to solve this matter:-

M/s Suchak Marketing Pvt Ltd Vs. Comm. of Service Tax, Kolkata [2013 (6) TMI 641]

[KASTURI SETHI]

Dear Querist,

I have gone through the case law cited by M/s. YAGAY AND SUN, Sirs. This judgement is very relevant and will be helpful to you. This judgement has been accepted by the department.

One more plus point for you, in the cited case ST-3 return was not filed whereas in your case there is only delay. So quote this case law while filing reply to the letter or SCN of the department.

[YAGAY and SUN]

This is just for your kind information to know that how law evolves/develops.

2017 (3) TMI 469 - CESTAT CHENNAI G. Booban Versus Commissioner of Central Excise & ST, Madurai

 

[Ganeshan Kalyani]

Enriching discussion.

[YAGAY and SUN]

Yes, discussions are always enriching as when we discuss law, it develops.

AI Summary

Waiver of Penalty available for delayed nil-service-tax returns where officer exercises discretion under service tax rules.
Late fees for delayed ST-3 returns with nil tax liability are subject to discretionary waiver by the assessing officer under Rule 7C(1) proviso; adjudication is fact-specific, guided by case law and departmental practice, and administrative monitoring via ACES leads to issuance of notices and compliance reporting rather than automatic exemption.