TaxTMI 
TaxTMI 
2017 (10) TMI 562
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.... Finance Act, 1994. The Department has issued a Show Cause Notice vide C.No.IV/9/646/2010 STC adj. dated 29.09.2010 demanding service tax already paid along with interest with a proposal to impose penalty under Sections 76, 77 and 78 of Finance Act 1994. A reply was furnished by the appellant on 03.11.2010 informing the Adjudicating Authority that the appellant had paid service tax along with interest on various dates under Section 73(3) of Chapter V of Finance Act, 1994. However, the learned Additional Commissioner confirmed the demand and appropriated the service tax amount of Rs. 13,36,869/- and interest of Rs. 1,88,952/- already paid and imposed equal penalty of Rs. 13,36,869/- under Section 78 of Finance Act, 1994 vide Order-In-Original No.STC/30/2012-ADC(LTU) dated 04.05.2012. Aggrieved by the said Order-In-Original passed by the learned Additional Commissioner, the appellant filed an Appeal before the learned Commissioner of Service Tax (Appeals), Chennai, who after due process of law rejected the Appeal vide Order-In-Appeal No.295/2015 (STA-II) dated 30.10.2015. Aggrieved by the said order of the Commissioner, the appellant filed an Appeal before the first respondent in ter....
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....ote that the circular issued by Central Board of Excise and Customs allows non-imposition of penalty, when service tax and interest paid prior to Show Cause Notice. 4. The learned counsel for the second respondent would submit that this is a case, where the appellant had charged and collected service tax on their clients, but had not remitted the same to the Government and only when the Auditing Officials found the same, it was paid. There is suppression of facts by the appellant. Therefore, the department imposed penalty. 5. Heard the learned counsel for the appellant and the learned counsel for the second respondent and also perused the materials available on record. 6. On perusal of the records, it is seen that the appellant herein was rendering the services of 'Consulting Engineer, Commercial Training or Coaching and Man Power Recruitment or Supply Agency Services' to various IT and Engineering Companies, like Satyam Computer Services, Titan Industries, various divisions of Ashok Leyland etc., and were registered with the Service Tax Department with Registration No. AACCG6156EST001. They also provide service of recruitment of skilled manpower to their clients a....
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....undred and forty six only) paid by them vide challans dated 31.12.2009, 06.01.2010, 07.01.2010. 11.01.2010 and 19.02.2010 and through Cenvat account should not be adjusted and appropriated against the demand made at clause a) above; (c) Interest should not be demanded from them under Section 75 of Finance Act, 1994 on the demand made at clause a) above; (d) The amount of Rs. 1,72,273/- (Rs. One lakh seventy two thousand two hundred seventy three only) paid by them towards interest vide challans dated 31.12.2009, 06.01.2010, 07.01.2010, 11.01.2010 and 19.02.2010 for the period April 2008 to December 2009 as detailed in Annexure-A to this notice should not be adjusted and appropriated against the demand of interest made at clause c) above; (e) Interest of Rs. 1,00,820/- (Rs. One lakh eight hundred and twenty only) should not be demanded from them under Section 75 of the Finance Act, 1994 for the belated payment of Service Tax for the period May 2007 to March 2008 as detailed in the Annexure-B to this notice; and (f) Penalty should not be imposed on them under Section 76, 77 & 78 of the Finance Act, 1994 for the contraventions mentioned supra." 1....
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....imposed. Therefore, we are not going into the question of leviability of Service Tax as the appellants had already paid the same and they are mainly challenging the imposition of penalty. The appellants have drawn our attention to Section 73(3) of the Finance Act which is reproduced herein below: Section 73(3): Where any Service Tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the person chargeable with the Service Tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such Service Tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under Sub-Section (1) in respect of such Service Tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid: Explanation:- For the removal of doubts, it is hereby declared that the interest under Section 75 shall be payable on the amount paid by the person under this sub-section and also on the am....
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....ce. The Departmental appeal is dismissed. 6.4. Further, in case of M/s.Auto Transport Services Vs. Commissioner of Central Excise, Jaipur II 2006(3) STR 330 (Tri.Del.) the Tribunal held as under: 5. Considered the submissions of both sides and perused the record. It is not in dispute that the appellants have discharged their service tax liability and the interest leviable thereon before the issuance of show cause notice. Sub-section (2) A of Section 73 of Finance Act, 1994 as it stood during the relevant period reads as under:- "(2A) Where any service tax has escaped assessment or has been under-assessed or service tax has not been paid or has been short-paid or erroneously refunded, the person chargeable with the service tax, may pay the amount of tax on the basis of his own ascertainment of such tax or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of service tax, and inform the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise of such payment in writing, who, on receipt of such information shall not serve any n....
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.... 6156 E-payment Total 53402 14. The Additional Commissioner has also found that in respect of the interest amount of Rs. 1,00,820/- pertaining to the period from May 2007 to March 2008 as demanded in Annexure 'B' to the notice, the assessee has paid Rs. 1,00,820/- vide challan No.01022 dated 25.04.2012 and 0031 dated 27.04.2012 and that amount is required to be appropriated towards the demand of interest. The details of payments in respect of Annexure 'A' to notice, are as follows:- Sl.No Challan Date Service Tax (Rs) Interest (Rs) 1 31/12/09 356754 69956 2 challans 2 06/01/10 591375 82767 7 challans 3 07/01/10 73633 8077 1 challans 4 11/01/10 157149 10403 6 challans 5 19/02/10 49669 1070 2 challans 6 31/12/09(*) 36146 6156 3 challans 7 27/03/12 577 10523 2 challans 8 Cenvat payment 71566 - ....
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....me received for services rendered, within a prescribed date and they have also collected the service tax amounts from their customers. The tax amount collected for a long period and remitting the same after the advice of the audit authorities cannot be accepted as a reasonable cause for failure of remitting the amount and further, the appellant has filed ST-3 Returns for the said period, which did not reflect the actual taxable value, which is a deliberate suppression of information. In such circumstances and also considering the fact that the appellant has paid entire tax and interest, the Additional Commissioner has passed an order, by reducing the penalty amount to 25%, if the appellant pays the same within 30 days. The said order is extracted hereunder:- "8.4. The assessee has requested to invoke the discretionary power under Section 80 of the Finance Act, 1994 to waive the entire penalty proposed to be imposed on them. Section 80 of the Finance Act, 1994 provides for not imposing penalty if the assessee proves that there is a reasonable cause for the failure to comply with the provisions of the Act. In the present case, however, the assessee know that they are liable ....
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....me is paid within thirty days from the date of communication of this order in terms of proviso to Section 78 of the Finance Act, 1994. 10.7 I drop the penal proceedings initiated under Sec.76 and 77 of the Finance Act, 1994." 18. The appellant reiterated the same grounds before the Commissioner of Central Excise (Appeals) and the Commissioner upheld the orders of the Additional Commissioner in toto and aggrieved against the same, the appellant appealed before the CESTAT and by citing various decisions, raised the ground that if duty is paid before the issue of Show Cause Notice, no penalty and interest can be levied. 19. The CESTAT passed the impugned order on 28.10.2006 dismissing the appeal by holding that it is not in dispute that the appellant paid short-payment after being pointed out, however, they charged and collected service tax, which they have not remitted to the Government Exchequer and further, short payments were not made in one go, but over a period of four months. Challenging the same, the appellant is before this Court. 20. The point to be decided in the present appeal is whether the Show Cause Notice dated 29.09.2010 and the Order-in-Original dat....
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....sited such service tax into the Government Exchequer in time nor had intimated the department the details of such receipts in their ST3 Returns filed during the material period, which is not disputed by the appellant herein. Therefore, the appellant has contravened Section 70 of the Finance Act,1994 read with Rule 7 of Service Tax Rules, 1994. 24. From the foregoing, it is clear that the appellant has intentionally suppressed the service tax collected from its customers and failed to remit the same in the Central Government's Account for the period 2008-09, with an intention to evade payment of tax. 25. On perusal of records, it is seen that the categorical and undisputed facts are that having collected service tax from its customers, the appellant failed to remit the same in the Central Government's Account for the period 2008-09, but during the Audit, they pleaded that due to financial crisis, they were not in a position to pay the tax within the prescribed due dates. From which, it is clear that the appellant has intentionally failed to remit the service tax amount of Rs. 13,36,869/- collected from the customers into the Central Government Account for the year 2008....
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....ervice tax: "Provided that in respect of the cases, where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 upto the date on which the Finance Bill, 2015 receives the assent of the President (both Days inclusive), the penalty shall be fifty per cent of the service tax so determined.". Provided further that where service tax and interest is paid within a period of thirty days of -- (i) the date of service of notice under the proviso to sub-section (1) of section 73, the penalty payable shall be fifteen per cent of such service tax and proceedings in respect of such service tax, interest and penalty shall be deemed to be concluded; (ii) the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73, the penalty payable shall be twenty-five per cent of the service tax so determined: "Provided also that the benefit of reduced penalty under the second proviso shall be available. . "Explanation.-For the purposes of this sub-section, specified records means records including computeris....