2016 (5) TMI 1206

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....4/- towards service tax for certain technical testing done by a foreign service provider and for which the appellant ought to have discharged the tax under reverse charge. Appellant had admitted their lapse and voluntarily paid the service tax amount of Rs. 9,87,814/- along with appropriate interest prior to the issuance of the SCN. The issuance of SCN followed by the appellants reply resulted in the passing of OIO wherein the adjudicating authority had confirmed the duty demand along with interest which was also appropriated. He imposed a penalty of Rs. 10,000/- under section 77 and a further penalty of Rs. 9,87,814/- under section 78 of the Act. Being aggrieved with the order, an appeal was filed before the Commissioner (Appeals), and th....

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....act and there was no evidence adduced in the SCN to prove that non-payment or delayed payment was attributable to fraud, collusion, willful misstatement and suppression with intent to evade payment of service tax. The next contention of the appellant also substantiates that there would have been no intention to evade payment of tax for the reason that whatever the amount that appellant is eligible for credit for making the situation revenue-neutral. Section 73 (3) reads as under :- SECTION 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. ... ... ... (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person charge....

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....under shall be imposed in respect of payment of Service Tax under this sub-section and interest thereon. The law on this point is well settled that when there is no suppression, penalty under Section 78 is unsustainable. The adjudicating authority has in para-9.5 stated that appellant-assessee had suppressed the information and the same came to the notice of the department only when investigation was carried out and therefore the benefit of section 73 (3) of the Finance Act cannot be granted. This finding by the adjudicating authority traverses beyond the SCN as the notice merely extracts the provisions of section 78 and nowhere elaborates as to what was the fact that was suppressed with intention to evade payment of tax. The Ld. appella....