2021 (2) TMI 1395

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....), South Zonal Bench, Bangalore. 2. The facts of the case reveal that the present appellant-assessee, a Chartered Accountant Firm engaged in providing services classifiable under the taxable category of 'Practicing Chartered Accountant' has been registered on 18.12.2003 under Section 65(83) of the Finance Act of 1994. The Department on gathering intelligence that the assessee apart from other clients was also engaged by M/s. Karnataka State Finance Corporation to conduct the internal audit for a monthly consideration of Rs. 4.5 lakhs plus service tax from December 2005 onwards and was receiving regular fees plus the service tax, on verification, it was revealed to the Department that the assessee has not discharged any Service Tax from A....

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....ted 25.09.2017. Against which, the present appeal has been filed. 4. This Court, after hearing the parties, has framed the following substantial questions of law: "1. Whether the Customs, Excise and Service Tax Appellate Tribunal had been justified in approving the proceedings of the respondent-authorities under the provisions of Section 73(3) of the Finance Act, 1994, even if the appellant had paid the arrears of tax and interest prior to the issuance of show cause notice? 2. Whether the proceedings under Section 73(3) of the Finance Act, 1994 in this matter could be said to be justified by any of the reasons stated in sub-section(4) of Section 73 of the Act?" 5. The learned counsel for the assessee has vehemently a....

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....ion; or (c) willful mis-statement; or (d) suppression of facts; or   (e) contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax. 7. The aforesaid statutory provisions of law makes it very clear that in case tax has not been paid on account of suppression of facts on the part of the assessee or there is willful mis-statement on the part of the assessee even though the show cause notice has been issued prior to payment of tax, he will be liable for payment of penalty. 8. In the present case, the undisputed fact reveals as reflected from the Order of the Assessing Officer that the assessee came up with a plea before the Assessing ....

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....the First Appellate Authority is unsustainable and liable to be set aside and I do so. 6.2. As regards the penalties imposed under Sections 77 and 78, I find that the pleadings made by the appellant before the Tribunal and also the grounds of appeal do not factually contest findings recorded by the adjudicating authority and First Appellate Authority as to the culpability of non-discharge of the service tax liability despite having been collected by them from their client. In my view, since the amount of service tax liability stands collected but not deposited with the Government of India, question of invoking Section 80 does not arise. Accordingly I find that the appeal as regards setting aside the penalty under sections 77 and 78....