TaxTMI 
TaxTMI 
2024 (7) TMI 313
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....e with interest on 8-4-2015. The amount of service tax was Rs.7,81,872/- and interest was Rs.6,51,275/- which admittedly stand paid on 8-4-2015 prior to issuance of Show Cause Notice dated 30-12-2015. For the years 2011-12 to 2014-15, the Appellant has duly declared, in the ST-3 Returns the value of the said Business auxiliary service received by the Appellant, as being taxable and pursuant to such Returns, in regular course, the service tax also stands paid with interest, well before the issuance of the Show Cause Notice dated 30-12-2015. The details of payment of the Service tax are summarized at Page 38 of the Appeal. Despite the Appellant having paid up the Service Tax with interest for 2010-11 based on audit objection and despite the Appellant having duly declared the value of service in ST-3 Returns for the years 2011-12 to 2014-15 and paid the service tax thereon, on their own in regular course, Show Cause notice dated 30- 12-2015 was issued to the Appellant under the Proviso to Section 73(1) of the Finance Act 1994 demanding the said Service tax and proposing imposition of penalty on the Appellant under Section 78 of the said Act. The Appellant replied to the said Notice by....
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....4: 3.1 For the year 2010-11, the Appellant had not paid the service tax on Business Auxiliary Service received by the Appellant from foreign commission agent under the belief that the same was exempted under Notification 18/2009-ST dated 7-7-2009. However, upon being pointed out by Audit that the said service tax was payable, the Appellant paid the same with interest on 8-4-2015. The amount of service tax was Rs.7,81,872/- and interest was Rs.6,51,275/- (See page 73 of Appeal), which admittedly stand paid on 8-4-2015 prior to issuance of Show Cause Notice dated 30-12-2015. Since the service tax with interest stood paid, upon being pointed out by audit, before issuance of Show Cause Notice, no Show Cause Notice could have been issued in view of the provisions of Section 73 (3) of the Finance Act 1994, which provides that where the person chargeable with service tax, either or own his own ascertainment or on basis of tax ascertained by a Central Excise Officer, pays the same before issuance of Show Cause Notice, Show Cause Notice shall not be issued. Consequently, the issuance of the Show Cause Notice is bad in law and imposition of penalty under Section 78 pursuant to such show C....
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....2011-12 to 2014-15: 6. For the years 2011-12 to 2014-15, the Appellant has duly declared, in the ST-3 Returns the value of the said Business auxiliary service received by the Appellant, as being taxable and pursuant to such Returns, the service tax also stands paid with interest, well before the issuance of the Show Cause Notice dated 30-12-2015. The details of payment of the Service tax are summarized at Page 38 of the Appeal. It would be evident from the following Table that the value of Services for the period 2011-12 to 2014-15 for which service tax is demanded in the Show Cause Notice was duly reflected in the ST-3 Returns and the service tax with interest pursuant to such Returns stands paid: It is thus evident that for the period 2011-12 to 2014-15, the value of taxable service was duly reflected in the ST-3 Returns and the service tax pursuant thereto was paid by the Appellant on its own and in the regular course. The question therefore of issuing Show Cause Notice under Section 73 for this period and imposition of penalty under Section 78 does not arise at all. 7. Without prejudice to the aforesaid submission, in any event, since the 3.8 service tax with interest ....
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....xpenditure relating to commission paid to foreign sales agents but there was no payment of service tax under reverse charge or no declaration of expenditure figures in the ST-3 returns. I find that vital Information with regard to payment to foreign agents was not mentioned in the ST-3 returns. The statement of authorized representative of the appellant reproduced in para 6 of the show cause notice shows that appellant was fully aware of the service tax liabilities and the appellant took shelter behind Notification No.18/2009-ST dated 07.07.2009, which was wrong. The appellant's reliance on the decision of C.C.E. & S.T., LTU, Bangalore v. Adecco Flexione Workforce Solution [2012(26) ELT 3 (Kar.)] is misplaced because this decision is with regard to section 73(3) ibid and hence not applicable in the impugned case where section 73(4) has been invoked. 5.2.1 I find that in the case of Hindustan Petroleum Corporation Ltd (HPCL) v. Commr. of C.Ex., Mumhal [2015 (38) ST.IL. 131 (Tr. Mumbai)), it was held, inter- alia, that section 78 leaves no discretion to impose penalty when duty evasion is intentional by suppression of facts. I quote the relavant paras 15.1 and 15.2- ....
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....t could only have evaded duty intentionally by suppressing these facts. Hence the Section 78 leaves no discretion but to impose penalty equal to the duty confirmed... 5.2.2 The decision in the case of Rajasthan Spinning & Weaving Mills [2009 (238) E.LT. 3 (S.C.)) is also very relevant and I quote the following head notes. Penalty Mandatory penalty - Nature of - Penalty under Section 11AC of Central Excise Act, 1944 is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section Section 11AC ibid. (para 19] Demand and penalty Provisions therefor Interpretation of Both proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 and Section 11AC ibid use same expressions like fraud, collusion, wilful mis-statement, suppression of facts, or contravention of provisions with intent to evade payment of duty - Conditions that extend normal period of limitation for demand to five year also attract imposition of penalty - Section 11A and 11AC ibid-if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and....