TaxTMI 
TaxTMI 
2016 (11) TMI 320
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....s subject to audit by the Service Tax authorities. During the course of audit conducted by the authorities, it was noticed by the Revenue that service tax under reverse charge mechanism was not deposited for the services received from the foreign vendors to the tune of Rs. 12,90,540/-. The Respondent-assessee had agreed to the aforesaid observation of the audit department and had paid the service tax along with applicable interest, before issuance of Show cause notice. A show cause notice No.38/2011 dated 31.03.2011 was issued stating that there was willful suppression on the part of the Respondent in failure to pay tax and proposed to levy penalty equal to the tax amount due. The Respondent had replied to the notice on 02.06.2011 stating t....
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.... learned Commissioner (Appeals), the Appellant-Revenue has preferred an appeal before this Tribunal on the ground that the tax payer had not paid service tax in respect of the services received from Foreign Service provider on reverse charge basis, which was unearthed by the DGCEI; That the suppression has been clearly established as the fact of receiving services from various foreign customers came to light only upon investigation conducted by DGCEI; that extended period of limitation was invoked under proviso to Section 73(1) of the Finance Act, 1994 and consequently no waiver of penalty is possible under Section 80 of the Finance Act, 1994; that the case law relied by the Commissioner (Appeals) in the case of Atwood Oceanics (supra) has ....
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....by the Respondent was voluminous and that there were certain omissions while computing the service tax payment. However, when DGCEI had pointed out, they had immediately paid the tax along with interest. Also, they had paid 25% penalty under protest within 30 days as the Respondent was of the view that the benefit available under Section 73(3) of the Finance Act, 1994 was available to them which has been granted by the Commissioner (Appeals) itself. Further, he submits there was no suppression involved in the present case, as the only fault of the Respondent was non-payment of tax and that they have paid the tax upon being pointed out along with interest. To support his argument, he places reliance on the following judicial precedents where....
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....ith interest before issuance of show cause notice. As the whole dispute has arisen on the ground of allegation of willful suppression it is necessary to analyze whether there was any willful suppression or not. The Respondent is a member of the LTU. Their office was frequented by the Department officials/Appellant and their records were scrutinized. All the facts were known to the Department when they had visited the Respondent's premises. When there is knowledge on the side of the Department the invocation of extended period alleging suppression of facts with an intention to evade payment of duty would not arise. The contention of the Respondent that merely because there was a lapse, the same should not be construed as suppression is well ....
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....nd that Ahemdabad Tribunal in the case of Atwood Oceanics Pacific Ltd. Vs, CST Ahemdabad - 2013 (32) STR 756 (Tri- Ahmd.) is squarely applicable to the facts of the present case. The relevant extract of the ruling is reproduced below: '162. However, I find that the said assessee has shown its bonafide by rendering full cooperation to the department in the investigation and also making goods the liability immediately on being pointed out. The fact that they have already paid the service tax along with interest much before the issuance of show cause notice and they have borne the incidence of tax on their shoulders, is sufficient evidence to show that the reasons for not paying the service tax by the assessee were the technical/ legal ....
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.... show cause notice. However, I find that in the case relied by the Appellant, willful suppression was established and not litigated by the Appellant. However, in the present case, as seen above since there is no wilful suppression on the part of the Respondent, I am of the view that the case law relied by the Appellant is not applicable to the facts of the present case. Further, I also find that in case of Dhandayuthapani Canteen there was no audit/scrutiny conducted by the Department, whereas in the present case, the Respondent is a large corporate assessee registered with Large Tax Payer Unit ('LTU') and who is a regular tax payer and subject to various audits/scrutiny conducted by the Department. The Appellant/Department had also placed ....