2017 (5) TMI 1258

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....aid aircraft keeping effective control and possession of the same. 2. In addition, they have also provided various services like Y/A clearance, ATC clearance, DGCA clearance, Handling, Technical support etc. to other operators for a consideration. The department, on conclusion of investigation issued show cause notice dated 23.10.2013 demanding Service Tax amount of Rs. 2,57,46,894/-. The show cause notice also proposed to deny cenvat credit amounting to Rs. 1,14,08,852/- as well as for imposition of penalties under various sections under the Finance Act, 1994. The case stand adjudicated by the Commissioner by passing the impugned order dated 3.12.13 in which the following order was passed :- (i) The supply of aircraft on hire b....

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..... In the present case, only a part of the service tax demand has been paid by the respondent within a period of one month. Consequently, the penalty equal to the service tax demand will be liable to be imposed on the respondents. 4. With the above background, we have heard Shri Sanjay Jain, learned DR for the Revenue as well as Shri A S Hasija, learned Counsel for the respondent. Learned DR reiterated the points urged by the Revenue in the appeal. He argued that even though the entire service tax demand stands paid along with interest, since the same has not been paid within one month from the date of issue of show cause notice, the Commissioner ought to have imposed penalties under various sections of Finance Act, 1994. 5. The learne....

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.... in the impugned order. The Only point on which the Revenue is aggrieved is that the adjudicating authority has refrained from imposing any penalty under various sections of Finance Act, 1994, even though the demand itself has been confirmed on the basis of show cause notice issued invoking the proviso to section 73(1). The adjudicating authority has given detailed reasons for not imposing the penalty and the same are reproduced below:- 52. Whether the assessee is liable for penalty under section 76,77 and 78 of the Act. 52.1 In this regard, I find that the present SCN has also proposed penal action under section 76,77 and 78 of the Act, as they failed to assess the tax, file the return and deposit the tax within the presc....

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....e Tax along with interest. I further find that the CBEC vide letter No.137/167/2007-CX.4 dated 3.10.2007 had also clarified that if tax and interest is paid before SCN, all proceedings are concluded. In the case of M/s. Auto Transport Services vs. CCE - [2006 (5) STT 396 (CESTAT SMB) the Hon'ble Tribunal held that if tax with interest is paid, no SCN could have been serviced upon the assessee. Further, in case of CCE, Kolkatta I vs. Hazi Abdul Razzaque [2006-TIOL-1237-CESTAT-KOL], the Tribunal held that under section 73, if the amount is paid by Noticee before issuance of SCN, there is no need to issue any SCN, hence upheld the waiver of penalty. Thus, in view of principles of natural justice, the assessee is entitled for the benefits of wa....