TaxTMI 
TaxTMI 
2024 (11) TMI 286
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....ant is a fully owned State Government Company, however, is holding a Service Tax Registration for the purpose of discharging the Service Tax liability. The Department gathered an intelligence that the appellants have been paying 'Guarantee Fee' to Madhya Pradesh Government in view of the guarantee extended by the Government on behalf of the appellant/ borrower of the loans from the Banks and financial institutes. It is observed that for the amount of 'Guarantee Fee' paid by the appellant during the period from 01.04.2016 to 30.06.2017 the appellant is liable to pay service tax amounting to Rs.12,18,569/- alongwith the interest amount of Rs.56,93,134/-. Proposing the said demand that a Show Cause Notice bearing No.38/2020 dated 3rd June 2021....
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....s void in terms of section 73 (3) of Finance Act, 1994. Ld. Counsel further impressed upon that the appellant is an authority created under the Statute. There is no dispute to the said fact as has been acknowledged in the Show Cause Notice itself that appellant company is a fully owned State Govt. Company. Hence there can be no reason with the appellant to have an intention to evade the payment of Service tax or to suppress the liability. The non-payment in the present case has occurred purely due to ignorance on part of the appellant towards the service tax liability on the impugned amount of 'Guarantee Fee' paid by the appellant to the State Government of Madhya Pradesh for later standing as the guarantor to the appellant while procuring ....
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....that section 73 (3) of Finance Act, as impressed upon by the appellant is not applicable in the present set of circumstances, as present is the clear case of suppression of liability of the appellant, which could not have been unearthed except during the investigation conducted by the Department pursuant to the intelligence gathered about appellant's intention to evade duty. In the given circumstances and in view of sub-section 4 of section 73 of the Act benefit of section 73 (3) of the Act cannot be extended in favour of the appellant. Resultantly, there is no infirmity when the adjudicating authorities have held justified the invocation of extended period and have ordered imposition of penalty upon the appellant. Ld. Counsel has also reli....
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....ies that the omission to pay the tax cannot be equated to intent to evade the tax/duty. The relevant paragraph is reproduced below:- "Now so far as fraud and collusion are concerned, it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word "wilful" preceding the words "mis-statement or suppression of facts" which means with intent to evade duty. The next set of words "contravention of any of the provisions of this Act or Rules" are again qualified by the immediately following words "with intent to evade payment of duty". It is, therefore, not correct to say that there can be a suppression ....
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....nt in a given case is on revenue and these ingredients need to be clearly brought out in the Show Cause Notice alongwith evidence thereof. The active element of intent to evade duty by action or inaction needs to be present for invoking extended period." 10. Earlier also clarification was issued by TRU letter No.334/4/2006 dated 28.02.2006 vis-à-vis section 73 sub section (3) of the Finance Act wherein it was clarified that this sub section provides for conclusion of adjudication proceeding in respect of the person who voluntarily deposits the Service Tax as per the observed liability. In the present case, the moment appellant was informed about its liability vide letter dated 17.03.2020, the entire amount demanded was paid by the....
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....e department has not produced any other evidence except the oral allegations that the appellant has suppressed the relevant facts with a willful intent to not to pay the Service Tax. Hence, it is held that penalty has wrongly been imposed upon the appellant. This Tribunal in the case of YCH Logistics India Pvt. Ltd. (supra), as relied upon by the appellant has categorically held as follows:- "5. In the present case, we find that the contention of the appellant that they bona fidely believed that they are not liable to pay service tax but when the audit party raised the objection that they are liable nay service tax then they immediately paid the service tax along with interest which is admitted in the impugned order, is justified. ....