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2015 (5) TMI 144

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....issued to the appellant for demanding service tax of Rs. 28,92,655/- for the period 16.06.05 to 31.03.06 not paid under construction of residential complex. Appellants collected the amount and failed to remit service tax to the Govt. account. The adjudicating authority in his order dated 14.05.2008 confirmed the demand and also appropriated an amount of Rs. 28,92,635/- already paid towards service tax appropriated an amount of Rs. 57,852/- towards education cess and appropriated an amount of Rs. 75,639/- towards interest and imposed penalty under Section 76, 77 and equivalent penalty under Section 78 of the Finance Act, 1994. Appellant preferred appeal before the Commissioner (Appeals) against waiver of penalties. In the impugned order, the....

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....led Nil ST-3 returns for the half yearly ending September, 2005. Only after the case was registered by SIV section of Service Tax Commissionerate, evasion of service tax came to light. It is not the case of the appellant that voluntarily paid the service tax. He further submits that this is the case where the appellant collected the service tax along with the value of service rendered but failed to remit it to the department and knowingly suppressed the facts in their ST-3 returns filed in September,2005 and declared that taxable value realized during the period was Nil . He further submits that the Commissioner (Appeals) has already waived the penalties imposed under Section 76 & 77. He relied the following decisions:- 1. Kedia Business C....

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....stered with the department and filing returns regularly and during the period September, 2005 they have filed a nil return, in spite of knowing the fact that they already collected the amount from their clients on the above projects. Therefore, the appellants cannot plead for innocence for invoking Section 80. There are number of Tribunals and High Courts decisions where Section 78 penalty/under Section 11AC penalty were upheld, where there is a deliberate suppression of the facts proved with an intention to evade service tax. Hon ble Tribunal in the case of Kedia Business Centre (supra), by relying the Hon ble Apex Court and Hon ble High Court s orders upheld the penalty imposed under Section 78. The relevant portion is reproduced as under....

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.... case and accordingly any penalty under Section 11AC of the Central Excise Act or any interest on duty under Section 11AB of the Act was not avoidable on the ground that the amount of duty had been discharged before issuance of show-cause notice. I find that, in the case of Dharamendra Textile Processors (supra), the Hon ble Supreme Court held that penalty under Section 11AC of the Central Excise Act was mandatory. Following this ruling, the Court, in the case of Monarch Pipes Ltd., set aside the Tribunal s order [2007 (208) E.L.T. 470 (Tri.-Bang.)], wherein it had been held that penalty under Section 11AC of the Central Excise Act was not imposable where the assessee had already paid duty before issuance of the show-cause notice. The final....