AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 661
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..../-. When the said fact was noticed by the Revenue, they pointed out the contravention and, thereafter, the appellant deposited the service tax along with interest of Rs. 5,01,157/-. 2. In the above scenario, proceedings were initiated against the appellant by way of show-cause notice proposing imposition of penalty in terms of the provisions of section 78 of the Finance Act, 1994. After due adjudication, penalty of identical amount was imposed under section 78 by original adjudicating authority. The said order of adjudicating authority was upheld by Commissioner (Appeals) and hence, the present appeal. 3. I find the only challenge in the present appeal is to imposition of penalty. Learned advocate appearing for the appellant has fairl....
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....ere there is no malafide or suppression or mis-statement etc., with an intention to evade payment of duty. As in the present case, the appellants have collected service tax from their customers but were not depositing with the exchequer, nor even intimating the Revenue about their liability to pay, it is a clear case of malafide, suppression, mis-statement etc. 5. After appreciating the submissions made by both the sides, I find that there is no dispute on the facts that the assessee is under a legal obligation to file the requisite returns provided under the statute and to discharge its service tax liability accordingly. The appellant in the present case was duly aware of its legal obligations as they were registered with the serviced t....
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....ellant was on account any one of the ingredients mentioned in the said section 78. As already observed, the appellant was registered and was paying service tax but for the period involved in the present appeal. The said non-payment was detected by the department on investigations made against them. It cannot be held that such non-payment of service tax or even non-disclosure of the value of the same in the return was on account of the non-receipt of compensation from the clients as they were collecting service tax from their customers. Even otherwise, I find that the payment of service tax is the legal obligation of the service provider, irrespective of the fact of receipt of value of the service from service recipient. All these factors le....
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.... issued. However, sub-section 4 of section 73 is to the effect that sub-section 3 shall not apply in a case where service tax has not been levied or paid on account of fraud; willful mis-statement; or suppression of facts. As I have already held that non-payment in the present case was on account of suppression and with malafide, the provisions of section 73 (3) would not get attracted. 8. 1 For the above proposition, I refer to and relied upon the Hon'ble Supreme Court's decision in the case of Union of India Vs Rajasthan Spinning Mills reported as 2009 (238) E.L.T. 3 (S.C) laying down that when the statute provides mandatory penalty, the question of payment of duty before or after notice cannot alter liability to penalty. Inasm....
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....bserved as under:- "After giving careful consideration to the submissions, I find that the only reason stated by the assessee in their reply to the show-cause notice for the delay of payments of service tax, is financial crisis. Financial crisis is a universal plea, which could be made by any assessee. If it is accepted as coming within the meaning of the expression "reasonable cause" under section 80 ibid, the penal provisions of section 76 to 79 of the Finance Act will be just dead letters this cannot be the legislative intent. Hence financial hardships cannot be brought within the purview of the expression "reasonable cause" used in Section 80 of the Finance Act 1994." 10. Similarly, the appellant's claim to reduce the penalty ....