TaxTMI 
TaxTMI 
2019 (1) TMI 778
X X X X Extracts X X X X
X X X X Extracts X X X X
....d department for sake of convenience. 2. Brief facts are that the assesse were issued show cause notices for different periods alleging short-payment of service tax under the category of Business Support Service. After due process of law, the original authority confirmed the demand, interest and penalties. Hence these appeals. 3. The details of the appeal, the period of dispute and the amount involved is given below as furnished by the assessee:- Appeal No. OIO No. Period of dispute Amount Involved ST/40/2011 11/2010 dated 29.10.2010 April to Dec. 2008 Rs.2,59,20,009/- along with interest and penalties ST/68/2011 ST/423/2012 02/2012 dated 30.3.2012 Jan. 2009 to March 2010 Rs.2,52,41,055/- along w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he delay in payment was only due to the financial constraints which occurred due to sudden plunge in the business during the year 2008 when the above said client defaulted to make payments to the assessee. The assessee has produced certificate from the statutory auditor to establish that M/s. Rank Investments and Credits (India) Ltd. had defaulted in making the payments to the assessee. There is no suppression of any material fact with intention to evade payment of tax on the part of the assessee. Their books have been periodically audited and no unacounted information has been unearthed by the department from any source. Hence the imposition of penalty under section 78 of the Finance Act is not sustainable. He relied upon the following cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to deposit the amount collected as service tax with the Central Government. However, the said section does not provide for imposition of penalty for non-failure to comply with the said provision. The show cause notices have invoked section 73 also. Though the ld. AR has argued that there is suppression of facts on the part of the assessee, the impugned order or the show cause notice does not specifically state what is the particular act of suppression on the part of the assessee. In many cases, the Hon'ble Supreme Court has observed that 'fraud' appears along with willful suppression of facts and misstatements. Therefore there should be some deliberate and positive act on the part of the assessee with intention to evade payment of service....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be imposed. This is against law. Further, we have already held that there are no ingredients to impose penalty under section 78. The appellants have established that the delay in payment of service tax was due to the default of one of the clients and consequent financial hardships. They have given reasonable cause for failure and we hold that it is a fit case for invocation of Section 80 to set aside the penalties. The Hon'ble jurisdictional High Court in the case of K. Gopalakrishnan Vs. Commissioner of Central Excise, Chennai - 2017 (7) GSTL 292 (Mad.) had occasion to analyze a similar issue with respect to imposition of penalty under section 78 and observed that bonafide omission will not lead to conclusion of suppression under section....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 80 since the appellant has put forward reasonable cause for the failure to discharge the service tax liability. We therefore set aside the penalties imposed under Section 76 and 78 of the Finance Act, 1994 without interfering with the penalty imposed under Section 77 of the Act ibid" 9. Appeal No. ST/68/2011 has been filed by department contending that proper verification has not been done after appropriating the amount of Rs. 2,59,20,009/- already paid by appellant. In the grounds of appeal, it is stated that during personal hearing, the appellants submitted details of payment of Rs. 2,60,31,147/- towards service tax liability of Rs. 2,59,20,009/-. In para 10 of show cause notice, the payments already made is shown as Rs. 1,65,00,000....