2010 (2) TMI 137

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.... However, during the period from October, 2006 to March, 2007 they committed default of service tax in respect of the transactions for the said period. Later on, they paid the tax with interest on 06/10/2007. The service tax return was filed on 22/01/2008. In a show-cause notice dated 05/06/2008, the department demanded an amount of Rs. 28/- as differential interest on service tax under Section 75 of the Finance Act, 1994 and also proposed to impose penalty of Rs. 87,003/- under Section 76 of the Act. In their reply to the notice, the party submitted that they were not liable to pay any penalty inasmuch as they had paid the service tax before the issue of the show-cause notice. In their reply, they did not object to the demand of differenti....

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....nsidering the submissions, I find that the only surviving issue pertains to penalty under Section 76 of the Act, though in the Memorandum of Appeal the appellant has harped on taxability and valuation aspects also. With regard to the penalty imposed on them under Section 76 of the Act, the appellant has submitted that the show-cause notice ought not to have been issued inasmuch as the service tax with interest had been paid before the date of issue of the notice. They have also submitted that they had no intention to evade payment of service tax and, therefore, any penalty under Section 76 was uncalled for. They have also questioned the propriety of the lower authorities having relied on Commissioner vs. Machino Montell (I) Ltd. 2006 (4) ST....

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..... The only ground raised by them in the present appeal is that, as they had paid service tax with interest prior to issue of the show-cause notice, they are not liable to penalty under Section 76. No judicial authority on the point has been cited by the learned consultant. I am also not in a position to accept the arguments advanced by the learned consultant with respect to Sub-Section (3) of Section 73 of the Act. This provision of law restrains the department from issuing any show-cause notice for demand of service tax from an assessee where they have already self-determined and paid up the tax under intimation to the department. This provision of law in no manner restrains the authorities from taking penal action against such an assessee....