TaxTMI 
TaxTMI 
2008 (4) TMI 235
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.... Sl. No. Appellant/Respondent Orders-in-Appeal No. Service Tax demanded Penalties Imposed 1. M/s. AK & I Advertising Pvt. Ltd. V. CCE, Bangalore 33/2007 dated31-7-2007 Nil Rs. 200/- per day or 2% of Service tax per month which ever is higher u/s 76, Rs. 1000 per return u/s 77 & Rs. 1,35,104/-u/s 78 2. M/s. IB & W Communications (P) Ltd. V. CCE, Bangalore 32/2007 dated 31-7-2007 Nil Rs. 200/- per day u/s 76, Rs. 1000 per return u/s 77 & Rs. 2,00,206/- u/s 78 3. The issue involved in both the appeals is one and the same. Therefore, we are passing a common order. 4. Shri Prakash Mehta, learned Advocate, appeared on behalf of the appe....
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....r notice the decision of the High Court of Karnataka in the case of Commissioner-III v. M/s. Kennametal Widia India Ltd. - 2008-TIOL-169-HC-KAR-CX wherein the Hon'ble High Court has set aside the Tribunal's order and held that interest is leviable even when the short payment was made even before the issue of Show Cause Notice. In the said decision the question of law formulated was "whether the Tribunal was not justified in setting aside the order of Commissioner of Central Excise Appeals-II whereby the order of the Assessing Authority was concerned, holding that respondent assessee was not liable to pay interest under Rule 57 AH of the Excise Rules 1944 read with Section 11AB of the Act as the irregular credit that was availed by the asses....
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....lants had short paid the service tax, they paid the tax demanded along with interest even before the issue of Show Cause Notice. Both circulars dated 3-10-2007 are cited. The same is reproduced below. F. No. 137/167/2006-CX.4 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Dated: October 3, 2007 Subject: Issuance of SCNs for levy of penalty in the cases where service tax is paid suo-motu by the assessee - reg. Section 73 (1A) of the Finance Act, 1994 provides for conclusion of adjudication proceeding in the cases of willful suppression/fraud/collusion if the taxpayer pays service tax liability along with interest and a penalty equal to 25% of service tax amount, within ....
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....of proceeding in terms of sub-section (1A) and (3) of section 73 implies conclusion of entire proceedings under the Finance Act, 1994. (Gautam Bhattacharya) Commissioner (ST) 9. In terms of the above circular which has only clarified various provisions of the Finance Act, even in cases of willful suppression if the service tax along with interest and penalty equal to 25% of the service tax amount is paid even within a period of 1 month from the date of issue of Show Cause Notice, the adjudication proceedings will be concluded. In other words, no penalty will be levied under the other Sections. As regards the interest we are bound to follow the decision of the Karnataka High Court pointed out by the learned Departmental Representati....