2024 (6) TMI 621

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... On the ground that the Appellant was not filing ST-3 returns, an investigation was taken up. Based on the records maintained by the Appellant in the form of Income Tax Returns and other private records, the Department came to a conclusion that the Appellants have not paid the Service Tax of Rs.11,44,095/- during the period 2011-12 to 2014-15. A Show Cause Notice was issued demanding this amount along with interest and penalty. After due process, the Adjudicating Authority has dropped the demand of Rs.2,98,097/-. He confirmed the demand of Rs.8,45,998/-. In the course of adjudication, the Appellants have paid Rs.4,78,730/- by way of six Challans between the period 14.12.2016 to 22.12.2016. This amount has been appropriated by the Adjudicat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ch was not done in this case. He submits that the payment of Service Tax was not done on timely basis only because of the severe financial crunch of the Appellants. The very fact that they were reflecting the Service Tax payable in their Books of Account and in the Balance Sheet shows that they were carrying a bona fide belief that once the financial crunch get cleared, they will pay the Service Tax. Since they were showing all the details in their Books, they were not intentionally suppressing any facts. Therefore, he prays that the penalty on the Appellant company should be reduced to 50% in terms of first proviso to Section 78(1) of the Finance Act, 1994. 3. The Ld.AR submits that admittedly the Appellants were not filing the ST-3 Ret....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e equivalent to the Service Tax evaded. I find that the first proviso to Section 78(1) reads as under:- 78. Penalty for failure to pay service tax for reasons of fraud etc. (1) Where any service tax has not been levied or paid, or has been short-levied or short paid, or erroneously refunded, by reason of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person who has been served notice under the proviso to sub-section (1) of section 73 shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty which shall be equal t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....assessee in the books of accounts shall be considered as the specified records. 6. From the Order-in-Original it also gets verified that from page 5/13 of the Order-in-Original that the Service Tax liability of Rs.11,44,095/- for the period 2011-12 to 2014-15 has been arrived at after going through the Balance Sheet and all other records maintained by the Appellant. Therefore, factually their case would fall under the proviso to Section 78(1) of the Finance Act, 1994. Therefore, I hold that the Appellant would be required to pay penalty @ 50% of the confirmed demand of Rs.8,45,998/-. Thus, the penalty stands modified on the above lines. 7. So far as interest under Section 75 is concerned, I find that while the demand pertains to the y....