2019 (3) TMI 1433

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....e' and 'Business Auxiliary Service' rendered by them to their clients. Further, the appellant had not discharged the service tax liability on the gross amount received by not including the TDS amount received from their clients. On being pointed out by the audit, the appellant paid up the service tax liability of Rs. 36,69,976/- along with interest and also paid the penalty under Section 77 of the Finance Act, 1994. 2.1 However, later a Show Cause Notice dated 07.10.2010 was issued to them proposing to demand the service tax of Rs. 36,69,976/- under 'Manpower Recruitment or Supply Agency Service' and 'Business Auxiliary Service' and also for demanding penalty under Sections 77 and 78 of the Finance Act, 1994. After due process of law, th....

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....mitted to file the returns only for this reason. They have paid up the entire service tax liability for Manpower Recruitment or Supply Agency Service and Business Auxiliary Service. She contended that even though the Department was aware of the non-payment of service tax on TDS amount, the Show Cause Notice was issued only on 07.10.2010. The said demand is therefore barred by limitation. 3.3 She submitted that since the appellant had paid up the service tax in respect of Manpower Recruitment or Supply Agency Service or Business Auxiliary Service before the issuance of the Show Cause Notice, as per Sub-Section (3) of Section 73 of the Finance Act, 1994, the penalties imposed are unwarranted and prayed that the same may be set side. Furthe....

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....nder Section 78 on the amounts under Manpower Recruitment or Supply Agency Service and Business Auxiliary Service are unwarranted and requires to be set aside, which we hereby do. 7. Ld. Advocate for the appellant has also argued on the ground of limitation in respect of the TDS amount of Rs. 4,30,304/-. We note that in spite of the audit conducted by which the short payment of service tax was pointed out, the Department has chosen to issue the Show Cause Notice only on 07.10.2010. All the figures for quantifying the demand have been noted down from the accounts maintained by the appellant. No positive act of suppression has been adduced by the Department. Further, as per records, we find that the appellant had not discharged the service....