TaxTMI 
TaxTMI 
2026 (2) TMI 1278
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.... recovery of the differential interest amount of Rs.57,340/-, as computed in Table-6 above. Further I also order for recovery of the differential penalties amount for Rs.94,665/- and Rs.2,000/-, as imposed upon the appellant under impugned Order-in-Original, as bearing No.225/ST/GBN/2024-25, dated 30.09.2024 is hereby partially allowed discussed supra and the present appeal in above terms." 1.2 By the Order-in-Original dated 11.02.2022 following has been held:- "ORDER i. I modified and confirm the demand of service tax (including Education Cess and SHE) totaling to Rs. 1,11,365/- (Rupees One lac Eleven Thousand Three Hundred and Sixty Five Only) under the section 73(2) of the Finance Act, 1994 read with section 174 of the Central Goods and Services Tax Act, 2017 as discussed supra. I appropriate the service tax amount of Rs. 1,11,365/- paid by the noticee. (ii) I confirm the interest amount and order for recovery of interest of Rs. 1,32,054/- under section 75 of the said Act as discussed in para 19 supra read with section 174 of the Central Goods and Services Tax Act, 2017. I appropriate the interest amount of Rs. 74,650/- paid by the noticee. The balance in....
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....how cause notice dated 29.12.2020 was issued to the appellant asking them to show cause as to why:- "(i) Service tax amounting to Rs.1,50,372/- (Rupees One lakhs Fifty Thousand Three Hundred and Seventy Two Only) (including Cesses), not paid by them, payable on taxable services income received during the period 201415 should not be demanded and recovered from them under the proviso to section 73(1) of the Finance Act, 1994 read with Section 83 of the Act, and further read with Section 38A of Central Excise Act, 1944 and Section 174 of the Central Goods and Service Tax Act, 2017. (ii) Interest on the service tax at the applicable rate should not be recovered from them under them under the provisions of Section 75 of the Finance Act, 1994. (iii) Penalty should not be imposed upon them under Section 78 of Finance Act, 1994 for the reason of suppressing the material fact and value willfully with the department with intent to evade payment of Service Tax. (iv) Penalty should not be imposed upon them under Section 77(2) of the Finance Act, 1994 for violation of Rule 7 of Service Tax Rules, 2004." 2.6 In response of show cause notice received, appell....
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....dismissing the appeal of the appellant:- "10. Ab-initio, I observe that appellant has not contested for the demand which has been modified to Rs.1,11,365/- from Rs.1,50,372/- by the Adjudicating Authority on the basis of the calculations submitted by appellant. Hence, the issue of demand of service tax may be treated as settled. Now, as the service tax of Rs.1,11,365/-, Interest of Rs.74,650/-and penalty of Rs. 16,700/- has already been deposited and appropriated in the impugned order, the following core issues are before me to decide - i. Whether balance Interest of Rs.57,404/- on Service Tax of Rs.1,11,365/- as confirmed under impugned Order-in-Original is demandable or not? ii. Whether balance amount of penalty of Rs.94,665/- u/s 78 and Rs.2000/- u/s 77(2) of the Finance Act, 1994 are imposable on the appellant or not ? I shall discuss each issue separately and draw the conclusion therefrom. 10(1) Whether balance Interest of Rs.57.404/- on Service Tax of Rs.1,11,365/- as confirmed under impugned Orderin-Original demandable or not ? is On examination of the impugned order, I observe that the gross receipts of Rs.28,68,866/- ha....
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.... for the delay beyond six months. 3 More than one year 18 per cent. for the first six months of delay; 24 per cent. for the period beyond six months up to one year and 30 per cent. for any delay beyond one year. This notification came into force on the 1st day of October, 2014. c) Notification No. 13/2016-Service Tax, dated 01/03/2016- In supersession of the notification No. 12/2014-Service Tax, dated the 11th July, 2014, this notification prescribes interest rate for delayed payment of any amount as service tax in the situation mentioned in column (2) of the Table below, and fixes the rate of simple interest per annum mentioned in the corresponding entry in the column (3) of the Table:- Table-5 Serial Number Situation Rate of simple interest (1) (2) (3) 1 Collection of any amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before the date on which such payment becomes due. 24 per cent 2 Other than in situations covered under serial number 1 above 15 per cent. This notification came into force w.e.f. 11-05-2016. Now, I am inclined ....
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....mount of Rs.1,11,365/- 01.04.2015 to 30.09.2015 15% (18%-3%) 183 8375/- 01.10.2015 to 31.03.2016 21% (24%-3%) 183 11725/- 01.04.2016 Το 13.05.2016 27% (30%-3%) 43 3542/- 14.05.2016 Το 30.12.2020 21% (24%-3%) 1691 108348/- Total 131990/- Amount of Interest already paid by the appellant 74,650/- Net amount of Interest payable 57,340/- In view of the above calculations, I hold that the appellant is liable to pay the balance amount of Interest to the tune of Rs.57,340/-. 10(11) Whether balance amount of penalty of Rs.94.665/- u/s 78 and Rs.2000/- u/s 77(2) of the Finance Act, 1994 are Imposable on the appellant or not ? I observe that under impugned Order-in-Original, equal penalty of Rs.1,11,365/- u/s 78 of Finance Act, 1994 has been imposed upon the appellant and by appropriation of already deposited penalty of Rs. 16,700/-the adjudicating authority gave an option to get it reduced to 25%, if tax, Interest and penalty is paid within 30 days of receipt of the order. Further additional penalty of Rs.2000/- has also been imposed upon the appellant u/s ....
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....ire undisputed differential tax liability for Rs.1,11,365/- on 30.12.2020. It is very surprising that the appellant who had been providing taxable service and did not bother for collection of service tax from his service receivers separately and enjoyed the benefit of entire gross receipts. Under these circumstances, I am of the considered view that since equal penalty of Rs.1,11,365/- has been imposed upon the appellant u/s 78 of Finance Act, 1994, therefore, at this stage the appellant is not liable to get the benefit of reduced penalty. After appropriating the pre-deposited amount of penalty amounting to Rs. 16700/-, the balance amount of penalty of Rs.94,665/- is yet to be paid by the appellant. Furthermore, in view of the above discussions, I also find that as the appellant has contravened various provisions of Finance Act, 1994 and rules made thereunder, therefore, the appellant has been correctly penalized u/s 77(2) of Finance Act, 1994 and additional penalty of Rs.2000/- is also to be paid by them. Therefore, I am not inclined to accord any immunity to the appellant from payment of confirmed penalties and all the differential penalties as imposed under Section 78 &....
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....ll forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or subsection (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub- section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. (5) The amount paid to the credit of the Central Government under sub-section (1) or subsection (2) or sub-section (4), shall be adjusted against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1). (6) Where any surplus amount is le....
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....n (4) of section 73A is reduced by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, the interest payable thereon under this section shall be on such reduced amount. Explanation 2.-Where the amount determined under subsection (4) of section 73A is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, the interest payable thereon under this section shall be on such increased amount.]" 4.6 In the present case, the demand had not been made under Section 73(2) of the Finance Act, 1994 and the interest has been demanded in terms of Section 73 not under Section 73B of the Act, as such, the above clause should not be application. 4.7 It is also observed that in respect of this amount Adjudicating Authority and Appellate Authority themselves have concluded that appellant have not calculated any amount separately and have allowed the benefit of cum tax price to the gross receipts. Thus, it is enough to establish that the appellant was not calculating their amount of tax short paid separately representing service tax from their clients. The case is simply of short payment of service tax and the sa....